With a little more than one week left in the year, both the Fab Five (+$3.38 trillion) and the Telco Top Five (+$95 billion) are poised to end the year ahead of 2023. Each of the Fab Five added value this year, with Microsoft lagging their peers (+16%, +$450 billion) and Facebook/ Meta (+65%) and Apple (+$937 billion) leading the percentage and absolute value gains respectively.
The value equation is different for the Telco Top Five with Comcast (-$22 billion) and Charter (-$5 billion) currently losing value in 2023. Verizon is ending 2024 where they started ($37.70/ share to start the year, $39.93 as of Friday’s close), and AT&T (+$43 billion) and T-Mobile (+$70 billion) comprising more than 100% of the industry’s combined value gains. As of Friday, the difference between AT&T and Verizon’s market capitalizations was a mere $5 billion. At the beginning of 2024, that difference was $38 billion.
T-Mobile, fueled by strong earnings growth and continued share buybacks, is up 37% so far in 2024 with $70 billion in market capitalization added. We anticipate that they add a similar amount in 2025.
If Friday’s Bloomberg report is correct (here), we may have an ending very soon to the Crown Castle Fiber operations divestiture saga. TPG (future owner of all of DirecTV) appears to be the buyer for around $8 billion, and the transaction likely excludes Crown Castle’s small cell operations. This time, the end may be in sight, and it cannot come soon enough for Crown Castle.
Crown Castle is not the only one hosting private equiy firms, however. The long-awaited book on Lumen’s mass market assets is out for potential buyers, per this report from Reuters. The article details several possible structures, with the most likely outcome being a sale of a stake in the mass markets unit in exchange for a partnership with a national wireless provider. As a reminder, Lumen had $18.6 billion in debt, $2.64 billion in cash, and $2.7-2.8 billion in trailing 12-month EBITDA.
As a reminder, we will have a full Brief next Sunday with our annual CES preview (Jim will not be attending ths year, however, his first non-COVID miss since 2017). Full file is below. Happy Holidays and Merry Christmas from all of us at The Sunday Brief!
