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For long-term investors in Time Warner Cable stock, a good thing keeps getting better. TWC stock is up 20% over the past year and 79% over the past two years.
Now TWC shareholders are looking at gains of anywhere from 15% to 35%, depending on which company succeeds in pulling off the deal.
Trading today (Friday) at about $170 a share, TWC stock is already beyond several earlier bids. Analysts now estimate that it will take a bid from between $190 to $230 a share to win Time Warner's heart.
And make no mistake. The allure of Time Warner, the No. 2 cable operator in the United States, is so high that a merger deal is inevitable.
"With Time Warner Cable you have a known price tag," Roger Entner, CEO of Recon Analystics, told The Street. "You also have a profitable company that's executing well and doesn't have significant problems. This isn't a turnaround case."
That's why the No. 1 cable operator, Comcast Corp. (Nasdaq: CMCSA) tried so hard to buy TWC.
This Is Why TWC Stock Keeps Rising
In the 14 months following the announcement of Comcast's intent to buy Time Warner Cable, the New York-based company got leaner. It's profitable and enjoying growth in its subscriber base. And not only does TWC control 20% of the U.S. market, it has a large presence in the top two cities, New York and Los Angeles.
The $45.2 billion Comcast deal fell apart a month ago when it became clear that U.S. regulators, primarily the Federal Communication Commission (FCC) were unlikely to approve it over concerns the resulting company would be overwhelmingly big and powerful.
That's created an opportunity for other would-be buyers. Almost daily reports of suitor interest in Time Warner Cable has pushed TWC stock up 9% just in the past week.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.