CVC Stock Spikes, Analyst Gripes
Cablevision (stock symbol: CVC), one of the companies reportedly working on a deal to acquire 49 percent of AEG Live, saw a 64-cent per share spike after reporting its fourth quarter financial results February 28th.
In a note to investors, a Goldman Sachs analyst said its number of cable subscribers seems to have stabilized and the company’s "fundamentals" may be improving. Cablevision reported a Q4 profit on increased Internet and phone customers.
However, that was before speculation about a possible deal with AEG Live ramped up.
Pali Research isn’t quite so impressed, complaining that "Cablevision’s musical ambitions are going to unnecessarily tie up most of its available cash flow, limiting its opportunities to expand in other areas," Barron’s reported.
And Silicon Valley Insider, a popular digital business blog, reports that Pali analyst Rich Greenfield is advising investors to sell their Cablevision shares – not because of the AEG Live courtship alone, but because he believes Cablevision is eyeing other live entertainment assets.
"If we believed CVC’s actions were isolated to the AEG investment or even just one more theatre venue, we would have likely maintained our BUY rating," SVI quotes Greenfield as saying. "However, we believe several acquisitions are currently in the works (we believe CVC was meeting with its financial advisors in NYC last Friday concerning the AEG Live investment).
"In turn, we believe there will be several negative data points over the next year that increasingly frustrate current CVC shareholders with investors unlikely/unwilling to give CVC credit for the free cash flow its cable system/cable network assets are expected to generate over the next few years."
Cablevision has about 3 million cable TV customers in the NYC area and owns Madison Square Garden, basketball’s New York Knicks, hockey’s New York Rangers and three cable TV channels.