Why Charter Communications Shares Popped
Mar 18th 2013 5:46PM
Updated Mar 18th 2013 5:52PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Charter Communications jumped as much as 11% today, after reports broke that Liberty Media is buying a 25% stake in the cable provider.
So what: Shares shot up just after 12:30 p.m. ET today as sources began reporting that the two parties were close to a deal. Liberty will pay nearly $2.5 billion for the 25% piece of Charter, and shares of the country's eighth-biggest pay-TV provider quickly jumped to a valuation near $10 billion, in line with Liberty's offer. Liberty Media, which finished the day up 0.3%, also gained full control of SiriusXM Radio recently and has been increasing its stake in Live Nation Entertainment.
Now what: Shares of Charter are now up 50%, and John Malone bet seems to indicate that he sees it as a value play. Not only does his expected purchase mean a higher share price for Charter, but his direction could also help lead Charter back to profitability.
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