Cramer's Break-Up Plan For Time Warner
Stocks: (TWX)(VIA)(CBS)(CMCSA)
Jim Cramer, the most famous stock analyst in America, has suggested that Time Warner is worth much more in pieces than its is as a media conglomerate.
His analysis says that Time Warner cable is worth $11 a share, especially with its recent acquisition of assets from Adelphia. AOL may be worth $2 a share, of $8 billion, especially to a company like Microsoft. The company's studios should fetch $3 a share from a competitor like Paramount. HBO could be solf to a company like Viacom for $4 a share. The basic cable networks like CNN would be worth $6 a share to a company like CBS. He values the company's magazine group at close to nothing.
Time Warner may be worth more than he thinks. The studio division of Time Warner does about $10 billion a year with $1.3 billion in operating income. It would probably go for substantially more than Mr. Cramer's price of $12 billion.
Comcast has a market cap of $72 billion. Based on the subscriber count of Time Warner cable vs. Comcast's count, the cable operations could be worth $55 to $60 billion. Operating income at TWX cable operations runs about $4 billion per year. With the new Adelphia subscribers, that number should go up.
The operating income at the Time, Inc. publishing division is close to $750 million a year. Annual revenue is close to $5 billion. That company is probably worth $6 billion to $7 billion.
With operating income of over $3 billion, the TWX network group is probably worth in excess of $20 billion.
Cramer's number for AOL may be right. The division has almost $2 billion in operating income, much of its at risk.
The break-up value of TWX may be worth north of $120 billion. So, $30 a share on a break-up may be a better number.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own shares in companies that he writes about.
Jim Cramer, the most famous stock analyst in America, has suggested that Time Warner is worth much more in pieces than its is as a media conglomerate.
His analysis says that Time Warner cable is worth $11 a share, especially with its recent acquisition of assets from Adelphia. AOL may be worth $2 a share, of $8 billion, especially to a company like Microsoft. The company's studios should fetch $3 a share from a competitor like Paramount. HBO could be solf to a company like Viacom for $4 a share. The basic cable networks like CNN would be worth $6 a share to a company like CBS. He values the company's magazine group at close to nothing.
Time Warner may be worth more than he thinks. The studio division of Time Warner does about $10 billion a year with $1.3 billion in operating income. It would probably go for substantially more than Mr. Cramer's price of $12 billion.
Comcast has a market cap of $72 billion. Based on the subscriber count of Time Warner cable vs. Comcast's count, the cable operations could be worth $55 to $60 billion. Operating income at TWX cable operations runs about $4 billion per year. With the new Adelphia subscribers, that number should go up.
The operating income at the Time, Inc. publishing division is close to $750 million a year. Annual revenue is close to $5 billion. That company is probably worth $6 billion to $7 billion.
With operating income of over $3 billion, the TWX network group is probably worth in excess of $20 billion.
Cramer's number for AOL may be right. The division has almost $2 billion in operating income, much of its at risk.
The break-up value of TWX may be worth north of $120 billion. So, $30 a share on a break-up may be a better number.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own shares in companies that he writes about.
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