Wall Street a mixed bag for cable stocks
The stock market held mixed results this morning for the top-five publicly traded cable operators.
Financial markets appeared to be on the rebound in morning trading after seeing a large sell-off yesterday amid concern over the proposed $700 billion financial rescue plan. The Dow Jones industrials lost 372 points yesterday, which wiped out the gains that the index had made on Friday.
Comcast’s stocks closed yesterday at $19.88 per share, for a 4 percent decline, and were trading at $19.85 per share late this morning after opening at $20.04.
Charter Communications bounced back from a 9 percent drop yesterday when its shares closed at 89 cents per share, to 93 cents per share this morning.
Time Warner Cable stock closed at $24.83, which was down 3.7 percent, but rebounded to $25.07 per share earlier today.
Cablevision saw its stock spike up to $26.47 per share before noon after it had dropped more than 6 percent yesterday when it closed at $25.75.
Lastly, Mediacom Communications saw its shares drop from an opening price of $7.19 per share to $7 per share later in the morning. Mediacom’s shares closed at $7.17 per share yesterday for a 2.5 percent decline.
“In our opinion, cable operator shares are holding up better than shares of banks, financial companies and insurance companies because most investors understand their business models better,” said Mike Paxton, In-Stat’s principal analyst, multimedia group. “In other words, investors perceive less risk involved with their revenue streams and long-term earnings potential. How many investors truly understand derivatives and their importance as financial instruments?
“In addition, cable service has the reputation of being one of the last things consumers will cut back on during periods of financial ‘belt tightening.’”
More Broadband Direct:
• Broadband Briefs for 9/23/08