Wednesday, February 19, 2014

Google is Attacking CMCSA, TWC Merger on the Bandwidth Front Before The Deal Closes. Expect Higher than Anticipated Capex by New CMCSA and Pressure on the Stock.

While many vaporous strategic initiatives float market ward shortly after major strategic deals announcements, this one deserves watching and has plausibility. We suggest investors watch for a possible a Comcast commitment to a 2 gigabit system wide (including Time Warner Cable) upgrade during regulatory scrutiny. It would be hard for investors to calculate the increased capital spending needed for the upgrade. The stock could come under pressure.

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