Ths was a quiet fortnight despite news headlines and continued digestion of election results. The Fab Five lost $46 billion over the last week and $352 billion over the last two weeks. Most of the decline was in Google and Amazon shares. Concerns about cloud growth are impacting these two as well as Microsoft shares, with some offset for the Redmond-based software titan as analysts consider the impacts from any sort of Google Chrome divestiture.
The Telco Top Five continued their steady gains and are now up $158 billion for the year. Charter and Comcast continue to weigh on the group as investors see stronger growth opportunities with the traditional wireless providers. As we reported in last week’s full Brief, T-Mobile’s continued disproportionate market capitalization gains continue (+$3 billion last week; now worth $277 billion). Verizon also gained strength as Frontier shareholders approved their merger with Big Red. FCC and DOJ approvals will be required, with hopes that the change in Presidential administration might accelerate the approval process.
The DOJ recommended last week that Google sell its Chrome Browser as a remedy of their antitrust case (more in this New York Times article). In addition to selling Chrome, the DOJ also proposed significant changes or an outright sale of Android (which could be forced if Google fails to keep Android devices free from Google Maps, YouTube, Google Search and other Google-created apps).
These changes pose significant challenges to Google. Specifically, who would buy Chrome (and possibly Android)? Would the Trump adminstration allow Samsung to purchase the Google Browser? Could Google simply use the app transfer process (e.g., Samsung app transfers from the Galaxy S23 to the S24) to keep continuity of user experience? Our guess is that Google is already working through workarounds to ensure that Maps and Search are able to be transferred and that these apps are readily available through the Play Store (which does not be one of the apps that must be detached from Android). More on this in next Saturday’s online-only Brief.
Comcast announced that they would be spinning off several of ther cable channels, including MSNBC, Oxygen, and CNBC. With the company retaining NBC, it would appear that two of the three previously mentioned brands might need to change their name. Here’s a great article from Bloomberg outlining the changes and analyst insights.
Finally, DirecTV called off their merger with Dish after bondholders rejected their latest offer. We think that both companies will come together within the next 12 months as they need the content scale economies to make satellite TV profitable. We saw similar “on again/ off again” discussions betwee Sirius and XM prior to their merger. More here from The New York Times.
Please note that in the attached spreadsheet (below), we have updated the net debt and all of the schedules (which now include the MVNO net adds by quarter for Altice, Charter, and Comcast. We will have a brief comment on the updated Verizon schedule in the online-only Brief next Saturday.
Happy Thanksgiving from The Sunday Brief!
