The Sunday Brief

Connecting technology, telecommunications, and the internet

Value Creation – Long-term charts, Fab Five vs. Telco Top Five (November 4)

by | Nov 5, 2022 | TSB

This was a miserable week for the Fab Five, with $661 billion in equity market capitalization wiped out. Thus far in 2022, the Fab Five have lost over $3.6 trillion in equity value, which eclipsed all of 2021’s $2.5 trillion gain and part of 2020’s $2.6 trillion gain.

Apple, who had been bucking the trend, led the Fab Five down this week, losing $276 billion or more than two Verizons. They are on track to wipe out all of 2021’s gains. So are Google and Microsoft. Amazon and Facebook are already significantly under water, with Amazon on track to wipe out all of 2020’s gains as well, and Facebook – well, they are in a world of hurt.

The Telco Top Five also gave back ground this week, with each stock down between $1 and $4 billion for the week. What is more troublesome are the declines in the secondary market players (call them the “Telco Next Five”) like Lumen (down 57% YTD, new CEO, dividend eliminated), Cable One (down 59%) and Altice (down 71%, new CEO). Their losses make Verizon (down a mere 28% in 2022) look relatively healthy.

We could dive into more industry commentary but will save that for next Sunday. Last week’s Brief on competitive responses in the telecom industry was a lot more timely than we had originally thought, and we continue to be baffled by Charter’s $5/ mo. increase on their base just as new fiber entrants are emerging. Funding the Spectrum One bundle has a cost, however, and it’s going to increase alternative broadband provider investigation.

iPhone 14 availability post to come out tomorrow. More commentary in next Sunday’s Brief. File is below. Go Chiefs!

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