E Market Briefing For Friday, June 15

As a cynical investment community begins to understand how they'll forge ahead, whether they put a higher multiple on it or not, until performance is able to show 'actual' combined results ahead; the shares should gradually be able to improve as the Street and investors (who primarily own it solely for the dividend, and perhaps option-writing to create superior returns), we expect the $40 billion of share-overhang will grasp an error in fading AT&T beyond the initial 'arb-related' drop. It could even run up a few points.  

As TWX should be about 5-6% accretive for AT&T in their first year as a merged entity (and more after consolidation); suddenly eyes will open to a more attractive valuation level for AT&T. Anyway, that's my thinking and an explanation for why it wouldn't surprise me if 'T' was 40-50 in a year or so.


At press-time late Thursday the Justice Department announced that it will not seek a legal stay of the AT&T-Time Warner merger ruling, clearing the way for completion of the giant deal. It could occur as early as Friday; about a week earlier than their originally anticipated 'deal' conclusion.

There is complete 'merger panic' in media; as expected. And without trying to dissect the players (you all know how Comcast, Disney, FOX or others are either bidding, in-play or figuring it out like Verizon tries); I would like to offer a thought: a couple years from now 'fiber/digital/5G' will completely have overwhelmed cable, satellite and conventional telecom, relegating all who don't get-in-the-game 21st Century style, to low-multiple perdition.  

That's why AT&T (regardless what anyone says of their CEO) transformed brilliantly and actually will be able to absorb (even if they sell holdings like in Latin America, though I doubt they'll have to) the incurred debt smoothly over time. Of course there's a hiccup or two forthcoming, a part of all merger deals. But in their case, even after a year-long fight with the government I think they're in a sweeter spot than competition; which will pay extremes to achieve combinations remotely similar to what AT&T already has done.  

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