Cable stocks took it on the chin on Monday (June 13), as the S&P 500 fell into bear-market territory after investors opted to minimize risk as fears of the possibility of higher interest rates and other money-tightening measures came closer to reality.

The Standard & Poor’s 500 — which includes cable stocks like Charter Communications, Comcast, The Walt Disney Co., Fox Corp. and Paramount Global — dipped 3.9% on June 13, as inflationary fears spooked the markets. Investors appeared worried the Federal Reserve could raise interest rates in a move to slow down the economy after federal data showed consumer prices rose 8.6% year-over-year in May, its quickest increase since 1981.

The decline in the S&P 500 coincided with an 875-point (2.8%) drop in the Dow Jones Industrial Average and a 4.7% decline in the NASDAQ Index. The S&P’s Monday falloff brought the benchmark squarely in the bear market realm — down more than 20% since its January high — the first bear market in the U.S. since 2020, according to The Wall Street Journal.

Stocks across the board were hammered, but tech shares were hit particularly hard, with Alphabet, Meta Platforms (formerly Facebook), Apple and Amazon all falling between 4% and 6% for the day.

Netflix, which has been battling declines after it reported its first ever quarterly subscriber loss in Q1, saw its shares dip by 7.2% to $169.69 each. So far this year, Netflix has shed more than 70% of its value — the stock was priced at $602.44 per share on Dec. 31.

Among the biggest losers in the cable programming sector for the day were Paramount Global (down 8.1%), Warner Bros. Discovery (down 5.6%), and Disney. (down 3.7%). Distributors also were hit hard. Altice USA fell 7.5% to $9.25 per share, while Charter fell 4.2%. Cable One dipped 4.1% and Comcast slipped 3.4% for the day.

Streaming companies like Roku (-11.4%), fuboTV (-9.1%) and others were hit hard as well. Roku, a traditionally volatile stock in its own right, had been slipping in the past few days after a nearly 10% boost on June 8 as rumors swirled that Netflix was planning a takeover of the company. Those gains have been erased.

Telcos AT&T (down 4.5%), Verizon Communications (down 2.4%) and T-Mobile US (down 4.5%) fared better than satellite-TV service provider (and wireless newcomer) Dish Network, which fell 8.9%. Dish is in the middle of finishing out the first phase of its wireless buildout — the network needs to reach 20% of its footprint by the end of June — and launched service in Las Vegas earlier last month. ■  

A day after its much anticipated Analyst Day in Las Vegas May 10, Dish Network stock fell as much as 20.5% (down $4.46 per share) to $17.29 each in early trading Wednesday, a result of what some analysts said were remaining questions about the company and its wireless future.

Dish shares have been hammered since it reported disappointing Q1 results May 6 — the stock is down 35% since that date and has fallen 45% for the full year — but  many analysts believed that questions regarding the company’s planned 5G wireless service launch would be answered during the Analyst Day. Unfortunately, many left the four-hour May 10 event with more questions than ever before.

In a research note, Barclays Group media analyst Kannan Venkateshwar wrote that instead of offering concrete milestones for the wireless business, which investors could use to “crystallize a valuation framework,” Dish execs instead concentrated on “highlighting network architecture, which is important but something that Dish has been talking about for a while now and has been a topic of conversation more broadly for a few years.” 

Dish stock closed at $17.46 per share on May 11, down 19.7% or $4.29 each. 

Also: Dish Wireless: Strong Stomachs Required 

Venkateshwar said Dish did offer some numbers — it set a goal of 30 million to 40 million wireless customers, suggesting it would take a percentage of market share in the low double-digits — but declined to say how long it would take to achieve those results. Dish management also said it expected to generate more than $6 billion in enterprise revenue from private 5G networks, according to the analyst, although again the timeline was unclear. 

“If this is true then the upside for legacy operators is being significantly underestimated,” Venkateshwar wrote.

What was missing from the presentations was any mention of Dish’s capital structure, all the more complicated now that the company is free cash flow negative, mainly due to the cost of the wireless build, Venkateshwar wrote. Dish reported consolidated free cash flow, or cash flow after capital expenditures are made, of negative $191 million in Q1. That compared to free cash flow of positive $729 million in the prior year and analysts’ consensus expectations of positive $197 million for the period. 

In an email message, MoffettNathanson senior analyst Craig Moffett said the Analyst Day left attendees with more questions than answers.

“I think the consensus coming out of the meeting was that it is simply not credible to suggest that they will get 10% market share of the retail market just for showing up, without revealing anything truly differentiating about their service,” Moffett wrote, adding that the big question in the enterprise segment is why a business would pick licensed spectrum from Dish — for a fee — over free unlicensed spectrum (Wi-Fi). 

“And perhaps more pointedly, it’s still not clear why Enterprise customers will choose Dish over Verizon, nor why Dish will get, as they suggested during the Q&A at the end, half of the economics of every Enterprise deal when they are partnered with a lead systems integrator, cloud provider, multiple software vendors, and multiple equipment providers,” he continued.

But the biggest disappointment may have been the lack of any new developments regarding partnerships for the wireless service.

“[T]here was obviously a hope among the bulls that they would announce a major partnership — Amazon was obviously the hope — that might include some answer to the question of how they will finance their growth,” Moffett wrote. 

Investors have struggled with the economics of Dish’s wireless plans, with the company insisting they can build a state-of-the-art 5G network (using ORAN technology) for $10 billion and analysts insisting that it will cost much, much more.  

In Q1, signs that costs are ramping up significantly were evident as capital spending for the network — across both the retail wireless and 5G network — was up nearly 10 times to $597 million from $62 million in the same period in 2021. ■

A little more than three months after changing its name to Meta Platforms and a day after Wall Street returned the favor of a massive revenue guidance miss by cratering its market cap, analysts scrambled to make sense of it all. 

Facebook parent Meta lost about $232 billion in market capitalization Thursday (February 4) — the largest one-day drop by a single company in U.S. stock market history — after it said Q1 revenue would miss Wall Street forecasts by $2 billion, spurred by a combination of intense competition from TikTok, increasingly onerous privacy requirements from Apple Inc. and just plain bad luck. Meta’s Reality Labs unit, which creates the augmented reality and virtual reality products that are expected to be the building blocks of the metaverse, lost about $10.2 billion on revenue of $2.3 billion. 

While Q4 revenue at $33.7 billion was even with estimates, Meta said it lost about 1 million daily global users in the quarter, adding to concerns that its relevance is slipping with younger consumers. 

Meta’s dilemma is eerily similar to Netflix, which saw its stock fall 25% in January after it missed Q4 subscriber growth targets and said it would add just 2 million paying customers in Q1. Netflix has gained some of those losses back: It was trading at $405.18 on Friday afternoon, about even with the previous day.

Also: Netflix Isn’t Quite Dead Yet 

Meta shares fell more than 26% on Thursday, forcing analysts to rejigger their models for the stock and try to find some sense in such a dramatic miss. The stock fell another 2% on Friday, priced at $232.67 at 12:07 p.m. 

In report after report, analysts that follow the stock pointed to the surprising impact of short-form video juggernaut TikTok — even Meta CEO Mark Zuckerberg said on an earnings conference call that TikTok was “growing at a much faster rate” than Facebook’s own Reels short-form video service. 

At the same time, Apple’s new privacy measures for its iOS products are having a huge impact on ad revenue. On the conference call, Meta chief financial officer David Wehner said those iOS privacy requirements will cost Meta about $10 billion in lost revenue in 2022, which he called “a pretty significant headwind for our business.”

Most analysts were pretty shocked by the revenue impact, but kept as much optimism as they could for the company, maintaining their ratings on the stock but slashing their 12-month price targets by nearly $100. For many, their advice to investors was to ride out the storm, buy the stock at its new low-point and reap the benefits later.

Also: Metaverse or Meh-taverse? 

MoffettNathanson media analyst Michael Nathanson, in a research report entitled “Facebook: The Beginning of the End?” maintained his “buy” rating on the stock but dropped his price target from $420 to $380 per share. Evercore ISI Group analyst Mark Mahaney kept his “outperform” rating but slashed his price target to $350 from $430 per share, while Bernstein tech analyst Mark Shmulik maintained his “outperform” rating on the stock but dropped his price target from $400 to $350 per share. 

“There are days in this job that suck. Today is one of those days,” Shmulik wrote in a note to clients after Meta released its results. Shmulik noted that most analysts severely underestimated the impact of Apple’s decision to let iPhone and iPad users opt in or out of the identifiers for advertisers (IDFA) that apps use to track movement through the web and target ads accordingly. When users opt out, it makes those ads a lot less valuable.

While Shmulik and other analysts believe Facebook will eventually figure out a workaround to the IDFA, management didn’t help things during the earnings conference call by “striking a negative tone around the duration and cost (~$10B on ’22 revenues) of any potential long term fixes,” the Bernstein analyst wrote.

Nathanson, who has been a big believer that Facebook would exceed ad forecasts in the past, reduced his Q1 revenue estimate by $2 billion and his full-year 2022 revenue predictions by $12 billion, or 8%. Although he said Meta’s Q4 results were in line with most estimates, its Q1 guidance was “incredibly weak” and was a “headline grabber and not in a good way.”

Still, other analysts were optimistic of Facebook’s resilience, and saw the low stock price as a Netflix-like inflection point, referring to the streaming giant’s recent stock drop. In his note, Evercore‘s Mahaney said that Meta “could well be dead money for several months,” but remained a buyer of the stock because it is trading close to its 2018 trough multiple of 17 times cash flow, which could limit downside and because he believes the company’s new Q1 revenue guidance suggests that revenue trends are stabilizing.

Mahaney also is confident that Facebook’s Reels — its short-form video answer to TikTok — will succeed, and that its macro challenges are temporary.

“TikTok is a real issue, but primarily for Instagram, and much less so for Blue, WhatsApp, FB Messenger, FB Marketplace, etc.,” Mahaney wrote, adding that he still believes Meta has a compelling long-term business model.

“Meta Platforms has a robust combination of revenue growth (17% CAGR ‘21E-‘24E) and profitability (~40% GAAP Operating margins and 50%+ EBITDA margins in ‘21),” Mahaney wrote. “Their core Family of Apps operating margins of near 50% in FY21, supports the significant investment in Reality Labs. The FCF generation has been equally impressive: $39B in FY21. And this has allowed them to execute sizeable share buybacks ($40B+ in ‘21) that we believe are sustainable going forwards.” ■   

Charter Communications shares fell as much as 3.1% in early trading Monday after Bernstein media analyst Peter Supino downgraded his rating on the stock from “out-perform” to “market-perform,” citing competitive concerns and already-baked growth estimates in the share price.  

Charter shares were down as much as 3.7% ($27.53 per share) to $708.94 each in early trading Monday (July 12). The stock closed at $719.80 per share, down 2.3%, or $16.67 each on July 12.

In his report, Supino noted that he remains convinced of Charter’s “business plans, financial strategies and structural competitive position in most of the US,” adding that its growth trajectory in the medium term shouldn’t change.

But the analyst is worried about the growing competitive threat from T-Mobile and AT&T Fiber, as well as the possibility of a stricter regulatory environment. 

T-Mobile is aggressively rolling out fixed wireless high-speed internet access across the country, and expects to have 7 million to 8 million residential internet customers by 2025, implying 1.5 million additions per year.

Also Read: Analyst: After a Strong 2021, Cable’s Broadband Trajectory Could Reverse in 2022 

While several analysts, including Supino, have noted that fixed wireless is technologically inferior to cable broadband service, he sees it as carving out a niche in the market with customers that are looking for lower-cost, “good-enough” broadband access. 

“We believe the natural segmentation of the broadband market will provide more consumers with an opportunity to pay a lower price for ‘good enough’ broadband,” Supino wrote. “While the telco networks are absolutely constrained in terms of the number of residential customers they can serve, we believe the 5G technology and MHz expansions of mobile networks create a niche business opportunity for the ‘Big 3,’ led by T-Mobile as the first-mover on the more scalable, economical mid-bands.” 

AT&T’s recent plans to spin-off DirecTV with TPG and a separate merger between its WarnerMedia programming assets and Discovery Inc.,  will provide added financial stability to the phone company, Supino wrote. That should help AT&T Communications chief Jeff McElfresh achieve his stated goal of transforming AT & T into the country’s “premier broadband connectivity provider, period.” 

Other analysts have warned of a possible slowdown in the  broadband market, and Supino estimated that Charter, which added a record 2.1 million high-speed data customers in 2020, will see that growth slow substantially to 1.3 million in 2021 and 1 million in 2022. 

On the regulatory front, reports that Gigi Sohn, once a top adviser to former FCC chairman Tom Wheeler, is in the running to become the next chair of the agency, and the indecision around the long-term role of acting FCC chair Jessica Rosenworcel make the possibility that Sohn could ultimately lead the agency closer to reality. That, according to Supino, could mean that net neutrality and the reclassification of broadband as a Title II telecom service could rear its head once again. 

“As chairwoman, we think Sohn would probably pursue a form of broadband price regulation,” Supino wrote. “Were Sohn appointed, we would expect cable stocks to tumble. In such a scenario, we would expect Charter to decline more than Comcast given its much higher mix of EBITDA from internet service provision.”

Supino fully expected some backlash from the decision to downgrade Charter stock, and added that he expects the company to have strong cash flow and free cash flow growth in 2022 and beyond. But the potential volatility in the broadband segment is too great to ignore.  

“Charter's valuation multiples, while elevated, exist in a low interest rate, secular growth hungry world which has bid up nearly all valuations,” Supino wrote. “A seller of Charter who is in the business of managing stock portfolios must buy another stock … In the end, as is so often the case, our business model defines the decision. While we advise clients seeking to be right for the next 5 years and others focused on the next 5 months, Bernstein's price target horizon is 12 months. And on that horizon, we think Charter's stock looks ‘fair but full.’ For each unit of potential upside, we see about as much downside.”  

ViacomCBS and Discovery shares sank like a stone Friday afternoon, dropping more than 30% each as the company weathered a string of analyst downgrades, speculation around big insider sales and mounting sentiment that their respective streaming efforts (Paramount Plus and Discovery Plus, respectively) could falter.

ViacomCBS shares fell more than 30% on Friday to $46.28 each, down $20.07 each, after Wells Fargo Securities analyst Steven Cahall downgraded the stock to “equal weight,” and lowered his 12-month price target on the stock from $82 to $59 per share. It was the second downgrade of the stock in two days -- MoffettNathanson media analyst Michael Nathanson issued a “sell” rating on the stock on March 25. ViacomCBS shares have fallen a collective 53% since March 23. 

Discovery stock was down as much as 38.5% to $35.54 (down $22.21 each) in early trading Friday, after some reports speculated that one of the company’s insiders was potentially contemplating a big sale of shares. 

Discovery shares have wavered over the past few days as well, dropping 13% on March 23 and another 7% on March 25. 

The pressure on the stock was high enough Friday that it forced Discovery to issue a statement refuting the speculation.  

In a statement, Discovery said that “today's trading activity is not the result of insider transactions or transactions by Advance/Newhouse Programming Partnership or its affiliates. The company issued its outlook for the first quarter of 2021 on February 22, 2021 and provided additional guidance at the Deutsche Bank TMT Conference on March 8, 2021, and is comfortable reaffirming its outlook and the additional guidance. 

"The Company is confident in and pleased with the execution of its strategy, both with respect to its traditional business and the direct to consumer roll out," Discovery said. "It looks forward to releasing first-quarter results and hosting its quarterly investor call on May 10, 2021."

In his report, Cahall wrote that he believes the momentum that had driven ViacomCBS and other streaming programmers like Discovery and AMC Networks to record highs in the past few months has shifted. 

“Now times are changing and we're changing with the times,” Cahall wrote. And though he doesn’t those stocks will retreat to their historic lows, “we do see gravity pulling the multiples closer to prior norms. As such, we're taking price targets and multiples down along with downgrades.”

Shares of World Wrestling Entertainment fell more than 10% in afternoon trading Friday after the scripted sports giant reported disappointing Q4 results, stoking fears that higher expenses could eat up the benefits of its recent NBCUniversal deal in its first year.

WWE, like every other entertainment company, has been negatively affected by the pandemic. But the wrestling giant has been hit particularly hard as stay-at-home orders basically erased its live event revenue, which fell 97% in Q4 to $700,000 from $27.4 million in the prior year. Overall revenue dropped 26% to $232.2 million in Q4 and Operating Income Before Depreciation and Amortization (OIBDA, a measure of cash flow) fell 52% to $51.2 million. For the full year, revenue rose 1% to $974.2 million, primarily because of increased content licensing fees, and OIBDA increased 59% to $286.2 million, also due to higher licensing fees. 

On a conference call with analysts to discuss Q4 results, WWE chairman and CEO Vince McMahon said he expected a gradual turn to live events and was excited about the NBCU deal. As part of that transaction, subscribers to Peacock’s ad-supported tier can get WWE Network for $4.99 per month, half the $9.99 per month WWE charged.  

“This agreement is really awesome for our WWE fans,” McMahon said of the NBCU deal, adding it gives them greater value. 

But despite that optimism, some analysts feared that management comments on increased expenses and the confusing nature of the NBCU agreement would pressure shares. 

They were right.

 WWE held the analysts’ call at 5 p.m. on Feb. 4 and the next day, the stock was immediately impacted, opening at $53 per share, $3 per share below its previous day’s close of $56. By the afternoon the fall had become more pronounced as shares sank as low as $48.87 each (down 12.7%, or $7.13 each), before closing at $49.22 per share, down 12.1% or $6.78 each, on Feb. 5. 

In a research note, Evercore ISI analyst John Belton wrote that he was encouraged around solid guidance for 2021 and expectations for 2022, but expected investors to react poorly to some management comments around expenses and the NBCU deal.

“With the impact of COVID on WWE’s business better understood and with a guidance range for 2021 adjusted OIBDA established, focus has shifted to the business’s longer term earnings power now that a long-awaited licensing deal for the WWE Network has been reached with Peacock,” Belton wrote. “Unfortunately, we think investors will come out of the 4Q earnings cycle a bit disappointed by some of management’s comments around both higher than expected expense growth expectations beyond this year and the confusing nature of the Peacock agreement, and we are reducing our 2022E adjusted OIBDA forecast by ~4% to reflect this sentiment.”

WWE unveiled the NBCU deal in late January. According to that transaction, NBCU’s Peacock service would get exclusive streaming rights for WWE Network in the U.S. NBCU also would continue to air WWE’s Monday Night Raw on its USA Network. 

WWE had launched the WWE Network in 2014 and had enjoyed some early success. But the streaming service peaked at 2.1 million subscribers in 2018 and by Q4 2019 that number had dropped to 1.5 million. Investors and analysts feared that WWE would throw in the towel on streaming, but Vince McMahon had continued to stress that a big deal was on the way. During a conference call with analysts in February 2020 to discuss Q4 2019 results, McMahon continuously interjected that “the majors” are “clamoring” for WWE content. If the company did decide to do a licensing deal, he said, it could announce it before the end of next month.

“We’d be announcing that deal, if we go that way, in the first quarter,” McMahon said at the time. “That’s how far along we are.”

The pandemic, which began to take hold in March of that year, no doubt put a damper on any deal being finalized. But with the new Peacock deal, there are still questions as to what impact it will have on the overall operations.  

On the Feb. 4 earnings conference call, WWE chief financial officer Kristina Salen said that the first year would be the biggest in terms of revenue from the NBCU deal, because of the valuation for the subscribers and IP that will transfer over to Peacock.

“That will be all recognized in 2021, and then in 2022, you'll have the regular revenue recognition of the ongoing deal,” Salen said on the call. 

She added that WWE expects a “significant” increase in expenses due to higher production costs associated with its ThunderDome virtual video conferencing crowd system for live events and the return of workers from furlough. Despite those increases, Salen said OIBDA is expected to be between $270 million and $305 million in 2021, due to the Peacock deal, more live events and the escalation of core content rights. 

With OIBDA expected to be at best 7% higher or at worst 6% lower in 2021 than in 2020, most analysts saw that as an indication that increased costs would eat up most of the Peacock gains, at least in the first year. 

Belton estimated that about 25% of the revenue in the five-year deal will be realized in year one, adding in his note that under those assumptions, WWE could expect a $30 million OIBDA tailwind in the first year, of which about $15 million potentially reverses in 2022. “From there we believe the agreement will more closely resemble a typical rights deal with contractual annual fee escalators,” he wrote.

Barclays Research media analyst David Joyce, was a little more optimistic, adding that investors likely have “written off” this year, but that the Peacock deal and live events expected to pick up in the second half of the year could bolster the outlook for 2022.

Joyce added that although the Peacock deal reduces optionality for the WWE Network, Comcast NBCU’s stronger balance sheet and distribution strength could open other doors globally. 

“This backstop could also help WWE invest in more of a longer-term fashion in making content better at WWE, something that has been a source of operational volatility,” Joyce wrote.  

In a Jan. 29 research note, Wells Fargo Securities media analyst Steven Cahall wrote that operating expenses will be the key. If 2021 opex is more skewed toward personnel, marketing and content, then 2022 OIBDA could reach $350 million. That estimate rises to around $400 million if 2021 opex guidance is conservative and has a lot of one-time charges.

Cahall added that he's bullish on the stock if it can reach the high end of his 2022 OIBDA forecast. But he cautioned that WWE wasn’t “quite out of the woods.” He pointed out that reaching that level would mean WWE would have to spend more to squeeze higher ratings out of an already corded entertainment field, and noted that in the past, WWE has underperformed investor OIBDA expectations. 

“We think WWE gets the double-whammy up and down: higher multiple when OIBDA estimates move up, lower multiple when estimates come down,” Cahall wrote. “So, where opex goes, likely so goes the stock.” 

The short-squeeze that sent shares of video game retailer GameStop and movie theater owner AMC Entertainment to dizzying heights late last month helped drive a handful of cable stocks with substantial short-seller interests upward. Now, as the frenzy begins to subside, some investors are busy trying to figure out which stock may be next.    

AMC Networks, Discovery, ViacomCBS, and Fox Corp., all hit 52-week highs on Jan. 27, the height of the GameStop/AMC Entertainment short squeeze that saw shares in those two companies rise by 1,000% and 300%, respectively. Some of the AMC Networks gains may have been due to investor confusion -- AMC Networks is regularly confused with AMC Entertainment and both have similar stock ticker symbols (AMCX and AMC).

“I think AMC Networks were an innocent bystander, they just happened to have the same letters in their symbol,” Moody’s Investors Service SVP Neil Begley said. “They were just collateral damage for a short period of time.” 

AMC Networks declined to comment.

But for the most part, the stocks seemed to be targeted for one reason: they have the biggest short interests in the sector. 

AMC Networks has the largest short position among cable stocks, with 15.6 million shares or 90% of its float held by short-sellers, followed by Discovery (42.6%), ViacomCBS (22.4%). Fox is the only outlier -- its short position is relatively low at 10.5% but the broadcast sector is believed to be somewhat vulnerable to short-sellers.

In a research note, Wells Fargo Securities media analyst Steven Cahall said the gains in the shares were likely due to their short interest, but it was too early to tell what will happen next.

“Net/net we'd say there are a lot of folks on the sidelines with a negative bias on this traditional Media set due to valuation, and looking to be negative as and when catalysts emerge,” Cahall wrote. “We're taking a wait-and-see approach on a market correction, and generally tend to reserve ratings changes for when our fundamental thesis is evolving.” 

Other analysts did downgrade some of the stocks. Deutsche Bank media analyst Bryan Kraft downgraded ViacomCBS from “Buy” to “Hold,” and maintained his $32 per share 12-month price target -- 38% below its Feb. 3 close of $52.06 -- citing the short interest and concerns about the upcoming launch of its Paramount Plus streaming service and a looming NFL contract renewal for CBS in 2023. According to seekingalpha.com, Kraft wrote that “our fundamental outlook has not changed, the share price has -- in a material way.”

Earlier in the week, Citibank media analyst Jason Bazinet downgraded both ViacomCBS and Discovery from “Buy” to “Neutral”, speculating that their recent price rallies were in part due to short covering, according to stock website The Fly.

AMC Networks stock rose the most during the frenzy, rising 48% from its Jan. 22 close, followed by Fox (up 35%). Discovery and ViacomCBS each rose 33.2% during the period. 

For the most part, the lift was short-lived. Most of the stocks have fallen back to their pre-Jan. 22 levels, with Fox closing at $30.28 each on Feb. 3, and AMC Networks closing at $47.00 on Feb 3. Discovery held on to some of the prior gains, as did ViacomCBS, both finishing Feb. 3 at $40.81 and $52.06 per share, respectively. 

But those short-term gains could bode well for other stocks in the sector that have been targeted in the past by short sellers, including Fubo TV, which attributes 72% of its float to shorts, Altice USA (56.9%); Sinclair Broadcast Group (45.4%); MSG Networks (38.3%); and Lionsgate Entertainment (18.5%). While those stocks haven’t seen an accelerated interest yet, that could change quickly.  

“I think any company that has a high short position in it, particularly a company that doesn’t have a huge float, it’s going to be fairly easy for people like the Reddit community to get in there and manipulate those stocks,” Begley said. “If you're talking about much, much larger companies, it’s harder to play that role. Now the Street has wind of what’s going on here, and I think there will be a lot of non-Reddit folks, institutional money, that’s sort of  jumping on board as well.”

He added that Sinclair could be vulnerable because it is involved in two areas facing strong secular pressure -- broadcasting and regional sports networks. Sinclair bought the former Fox Sports RSNs from The Walt Disney Co. in 2019.  Since then, the networks have come under scrutiny as distributors have balked at high rate increases and in some cases dropped networks. In October, the Wall Street Journal reported that Sinclair was considering its options concerning the RSNs. 

Sports business website Sportico singled out Fubo TV as a potential short-squeeze target, picked by two top hedge fund managers as the next stock retail investors could send skyward. Fubo stock has been on the upswing -- it was up 52% between Jan. 22 and Jan, 25 to $57.47 per share and has risen more than 100% since Jan. 4. But despite those gains it  was still short of its 52-week high of $62.29 each, reached on Dec. 22. 

So there's still room for retail investors that want to participate in a buying spree. 

Cable networks seem to be ripe targets for short-sellers because they too have been pressed by the growing popularity of streaming SVOD services and their own direct-to-consumer offerings. For some, the days when linear networks are no longer the main distribution vehicle for content could be coming sooner rather than later. 

“The great pivot is underway, [but] it's late,” Begley said of the shift to streaming video. “Unfortunately, we were talking five years ago about what they needed to do -- their programming needed to look more like Netflix and their advertising needed to look more like Facebook. It’s finally happening now. We’ll see which ones are successful in being able to transition their businesses and their revenues, and which ones are not.”

Short selling has been around forever and cable and satellite companies have had their run-ins with hedge funds betting on price declines in the past. But interest in short selling was spiked in late January after a group of so-called "amateur" investors found a way to beat the shorts at their own game. 

Around Jan. 25, millions of those amateur  investors, banding together on sites like Reddit’s WallStreetBets, which has two million users, started buying huge amounts of GameStop stock via commission-free apps like Robinhood. That surge in buying, coupled with a short interest in the company of more than 100% when options are included, initiated a "short-squeeze" and drove up the price of the retailer by more than 400% in about a week. Some investors bragged that they had made millions of dollars on the stock’s ascension in a period of days, while vowing never to sell.

News of the run-up on GameStop shares caused some to cheer the action by what they saw as regular guys taking money from the idle rich. After Robinhood limited trading on GameStop and other similarly targeted stocks in an effort to slow down the frenzy, figures as diverse as Tesla CEO Elon Musk, comedian Jon Stewart and U.S. Rep. Alexandria Ocasio-Cortez criticized Robinhood’s action and cheered what they saw as a clever way for common folk to bridge the economic inequality gap. Later, according to some reports, some investors wondered if much of the acceleration in the share price was sparked by other hedge funds participating in the squeeze. 

In other words, the real damage may have been caused by rich guys trying to screw over other rich guys after all.      

But whether the most recent short squeeze was started by millions of former GameStop customers from the safety of Mom’s basement or stuffy investment bankers sipping brandy and complaining about the help, doesn’t really matter. Together they apparently helped drive many a short-seller into a panic and brought into question the entire validity of the stock market. If a band of relatively unsophisticated “normal guys” could manipulate stocks so easily, what does that mean for the overall health of the market? Melvin Capital, the hedge fund that had the biggest short position in GameStop reportedly sold out of that position early, potentially losing billions of dollars. Others took less dramatic hits. According to CNBC, the overall short position in GameStop dropped to 39%  

The concept of short selling has been around almost as long as the stock market itself. In a short sell, an investor borrows stock from another investor, usually a fund, with the promise to pay it back at a later date. The idea is that the short seller gets the stock when it is priced high, and returns it when it is low. In some cases, short sellers can make big money, but there is also a risk that the stock will rise in that timeframe.  

The short-squeeze is fairly easy to do, as long as you have the money and the time to seek out a target. Essentially, short-squeezers look for a stock that has a high short seller interest -- usually more than 20% of its float -- and low liquidity. Next, they have to just keep buying shares at a rate that forces the short sellers to buy their shares early. That combination, particularly in a stock that has a low float, can drive prices skyward. 

In some cases, that can lead to huge windfalls. According to reports, one investor bragged that they turned a $53,000 investment in GameStop into a position worth $40 million during the frenzy. But there were other stories of investors that bought shares on margin and face losing their homes if the price of the stock falls enough.

And therein lies the rub. As the frenzy around the short-squeeze started to wane, shares of GameStop began to plunge. On Feb. 2, less than two weeks after the squeeze began, GameStop shares closed at $90 each, down 60%. On Jan. 28, GameStop shares reached their pinnacle of $483 per share. One month earlier the stock had been trading at $20.99 each. AMC Entertainment shares rose more than 500% during the squeeze from $2.98 per share on Jan. 22 to $20.36 on Jan. 27. The stock closed at $8.97 each on Feb. 3. 

Because in the end, even in the stock market, fundamentals eventually win. GameStop is a relic in an industry where it is easier and cheaper for consumers to download games on the internet. If it wasn’t for sales of physical game systems and less expensive used games, GameStop’s business would be practically nil.

That should remind you of another industry where the threat of internet streaming is eroding its business -- cable. But unlike GameStop, cable companies have shifted gears from relying on the sale of what is quickly becoming a commodity -- content -- and have banked on building out their networks, protecting the cable business from a GameStop-like assault. That, and the fact the stocks for operators were up about 40% last year, usually a turn-off for short sellers. 

Begley said that typically, short sellers seek out companies that are in areas of secular decline and not adapting well. Cable, he said, could arguably be losing the content wars to streamers, but their broadband businesses are thriving. 

“In the cable industry, while they are going to lose the pay TV world over time, they are more than making up with it with broadband,” Begley said. “Broadband comes with very high margins, so people are not concerned about that.”

A day after signs that efforts to flatten the COVID-19 curve were beginning to pay off drove the Dow Jones Industrial Average up more than 1,600 points, the market ended in slightly negative territory on April 7. But cable stocks, which have been just as volatile as the rest of the market, managed to show signs of growth.

The Dow closed on April 7 down about 26 points, erasing a 930-point surge early in the day. The day before, the index closed up 1,627 points on hopes that efforts to stem the spread of the coronavirus were working. 

Those positive signs continued. In New York, one of the hardest hit areas in the U.S., there were indications that hospitalization and death rates were beginning to stabilize. And China had its first day since January with no deaths from COVID-19. But legislators warned that the positive signs meant that efforts to stem the spread of the virus, like sheltering in place, must continue. And there were no signs that would change anytime soon. 

Although some investors were still encouraged by the $2.2 trillion federal stimulus package, others worried about a looming recession, and how long it would last.

Cable stocks, which have generally followed the market through its ups and downs over the past several weeks, were mostly up on Tuesday.

With the exception of programmers ViacomCBS and Discovery -- which were up 5.4% and 5.2% respectively -- the gains were modest.

Cable One led distributors with a 2.6% gain ($42.14 each) for the day to $1,688.30 per share, followed by Comcast, which was up 2% (71 cents) to $36.94 each, and Altice USA, up 1% (24 cents) to $23.44 per share. Charter Communications was down 1.7% ($7.80 each) for the day to $451.75 per share.

Telco stocks fared about as well. AT&T was up 2.2% (64 cents) to $30.08 after announcing a $5.5 billion loan deal to help with its liquidity. Verizon Communications was essentially flat, up 0.5% (28 cents) to $56.94 per share, and Dish Network was down 1.6% (34 cents) to $20.77 each.

Related: AT&T to See More Cord Cutting Amid COVID-19 Recession: Analyst 

On the programming side, ViacomCBS and Discovery led the gainers, and were followed by AMC Networks, up 3.1% (70 cents) to $23.35; and WWE, up 2.4% (85 cents) to $35.95. Disney and Fox were each up 1.7% for the day, closing at $101.24 and $25.49 per share, respectively. 

The Dow Jones Industrial Average fell nearly 3,000 points Monday (March 16) as investors, fearful of the long-term economic impact of the coronavirus outbreak, worried that federal recovery efforts won’t be enough to stop another recession.

Stocks fell 13% Monday (after another trading halt at the start of the day) to 20,188.52, down 2,997.1 points (its worst single day since 1987) as investors fretted that moves by the government over the weekend won’t be enough to prevent a worldwide recession. On Sunday, March 15, the Federal Reserve dropped its benchmark interest rate to near 0%, and pledged to purchase $700 billion in government bond debt, moves investors took more as a sign of bad things to come. 

While restaurant and hospitality stocks seemed the hardest hit -- some down nearly 40% Monday -- as Americans were urged not to leave their homes, media stocks, which were supposed to benefit from that restriction, also took it on the chin.

The downturn erased a near 2,000-point gain in the Dow on Friday amid hopes that the federal government would step in to avoid an economic disaster. While the stimulus package was reminiscent of the 2008 federal bailout, that may have been the problem. With such a massive effort underway so soon, some investors may have seen it as a sign that things are only expected to get worse.

That sentiment trickled down to the cable sector, which just days before was expected to benefit as an increasingly home-bound populace would likely spend more time taking advantage of their pay TV subscriptions and watching streaming video. While that may still be the case, investors had other things to worry about.

In a press conference March 16, after admitting the coronavirus pandemic could take at least until July or August to control, President Trump acknowledged the sharp stock market decline, telling reporters that the U.S. “may be” headed into a recession, before adding that he expects a “tremendous surge” once the virus runs its course.

On the pay TV side, Altice USA led the decline for cable stocks, down 23% ($5.02 each) to close March 16 at $17.20 per share. The rest of the sector fared a little better, with Charter Communications down 14.3%, CableOne off by 13.4% and Comcast down 8.4% on Monday. As a whole, the sector was down about 32% since Feb. 13.

Satellite TV giant Dish Network fell 13% ($2.80 each) to $18.79, culminating a month where it lost more than half of its value, when Dish shares were priced at $40.18 each.

AT&T, which expects to launch its HBO Max service in May, fell about 7.7% ($2.66) to $31.81 while its telco counterpart Verizon Communications dipped 6% ($3.18) to $50.99 each.

It continued to be a tough day for programmers. The Walt Disney Co. stock fell 7.3% to $95.01 each while ViacomCBS dipped 17% to $13.61 per share. Discovery fell 10% to $20.63 and Fox Corp. was down 8.2% to $24.01. AMC Networks finished the day up slightly, closing Monday at $28.06 each, an increase of 12 cents per share, or less than 1%. 

The Dow Jones Industrial Average had its largest single-day point loss on Monday, dropping more than 2,000 points as investor concern over a potential crude oil price war and the global impact of the COVID-19 coronavirus pandemic gained momentum, with some cable stocks falling by double-digit percentages.

The Dow fell more than 7% at the open on Monday -- prompting a 15-minute halt to trading -- after Saudi Arabia announced a $6 to $8 per barrel discount for crude oil to customers in Asia, Europe and the U.S. That price reduction triggered fears of an all-out price war and sent investors out of stocks and toward the less risky bond market. At one point, the Dow was down more than 2,100 points to 23,706.07, and see-sawed throughout the day, closing at 23,851.02, down 2,013.76 points, or about 7.8%. Other indexes had a rough day as well, with the S&P 500 losing 7.6% and the NASDAQ Index off by 7.3%.

The Dow neared bear market territory Monday, ironically on the 11-year anniversary of the longest bull market in history.  

The Coronavirus also continued to fuel fears, with the number of cases worldwide rising to 111,000 and the death toll at more than 3,800. In the U.S., at last count the virus has infected about 564 people across the country and killed 22.

This is the third major drop in the index in the past month. The index fell 11% between Feb. 14 and Feb. 28, rebounding to a record single day gain on March 2. But as news of more cases and deaths from the coronavirus continued, the Dow fell into a tailspin. Since Feb. 13, the index has lost about 18% of its value.

Cable stocks were battered along with the rest of the market, with Dish Network taking the biggest hit among distributors, falling 14.7% ($4.28 each) to $24.93 per share, followed by Altice USA, down 12.3% ($3.18 each) to $22.65 per share. The rest of the distribution sector had a rough day, with Cable One down 7.7%; Charter Communications down 6.8%; AT&T down 6.3%; and Comcast down 6.2%. If there was a bright spot in the sector, it was Verizon, which managed to fall only 1.8% ($1.04 each) to close at $55.83 per share on Monday.

Programmers also took it on the chin, with Viacom declining 11.1% to $19.17 each, followed by Disney (down 9.5%), Discovery (down 7%), AMC Networks (down 4.8%.) and Fox (down 4.7%). 

The stock market started the week on a higher note, gaining nearly 1,300 points as investors placed bets that the central banks will help protect economic growth from any pitfalls caused by the coronavirus, dragging cable stocks along for the ride.

The Dow Jones Industrial Average closed Monday up 1,294 points (5.1%), its largest single day point gain on record, a reversal from the prior two weeks that saw record declines.  While the index still hasn’t fully emerged from the hole it created between Feb. 14 and Feb. 28 when it fell nearly 4,000 points (12%), it was a good start. And cable stocks, which took a clobbering last week along with the rest of the market, started to climb back up.

Comcast led distribution stocks with a 5.2% gain on Monday ($2.09) per share to $42.52 each, followed by Cable One (up 3.3%), Altice USA (up 1.4%) and Charter Communications (up 1%).

Telco AT&T was up 5.6% ($1.96) to $close at $37.18 for the day, which also coincided with the launch of its AT&T TV streaming service. Verizon was up 5.8% to $57.32 and Dish Network was up 2.4% to $34.33 per share.

On the programming side, Fox Corp., which was hammered last week as investors worried about companies with strong ties to Asia (the source of the coronavirus) gained 4.4% ($1.37) to close at $32.11 each. The Walt Disney Co. rose 2% to $119.98 each and Discovery rose 2.7% (70 cents) to $26.40 per share. Viacom was down 1.2% (30 cents) to $24.31, and World Wrestling Entertainment fell 1% to $46.36 to close out the day. 

The Dow Jones Industrial Average plunged nearly 800 points Tuesday as investors remained skittish over uncertainties around U.S. trade policy with China, fueled by a morning tweet by President Trump. The meltdown battered most tech stocks but turned out to be a mixed bag for cable shares.

The Dow closed at 25,027.07 on Tuesday, down 799 points as enthusiasm waned concerning the 90-day tariff truce in the U.S.-China trade wars struck over the weekend, after President Trump tweeted “I am a Tariff Man.”

[embed]https://twitter.com/realDonaldTrump/status/1069970500535902208[/embed]

Investors feared that animosity between the world’s two biggest economies could heighten, erasing any gains in the U.S. and rocking already shaky markets in Europe and Asia. 

The so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Google — had a rough day Tuesday, dropping between 2% and 5% each, while cable stocks were down but declines were not as severe.

Facebook fared the best of the FAANG stocks, closing at $137.93, down about 2.2% ($3.16 per share) while Netflix closed at $275.33 per share Tuesday, down $14.97 each or about 5.2%. Amazon fell 5.9% ($103.96 each) to close at $1,668.40 per share and Google dropped 5% ($55.61 each) to close at $1,050.82 per share. Apple dipped 4.4% ($8.13) to $176.69 per share.

Cable stocks fared a bit better, with declines in the 1% to 3% range.

Comcast fell hardest in the sector — down 3.7% ($1.46) to $37.69 per share, while Charter Communications dipped 1.5% ($4.86) to $321.84 each. Liberty Global dipped 2.1% and Altice USA was down 1.3% for the day, while Cable One was the sole gainer, rising 0.5% ($4.35 each) to $866.62 per share.

AT&T was down 3.1% (98 cents) to $30.73 and Verizon was essentially even, closing at $58.13 per share Monday, down 3 cents each. Dish Network had the biggest decline in the satellite sector, dropping 4.4% ($1.46 each) to $31.93 per share.

On the programming side, broadcaster CBS had the biggest decline, falling 4% ($2.16) to $51.35 per share. The rest of the sector was down between 1% and 2% each, with The Walt Disney Co. closing at $112.94 (down 2.4%), AMC Networks closing at $57.06 (down 2.1%); Viacom finishing the day at $30.88 (down 1.9%) and 21st Century Fox priced at $49.12 (down 1.1%).

Cable stocks continued to slide -- although there were some bright spots -- in the second day of a stock market sell-off driven by investors wary of slower economic growth and increased trade tensions.

The Dow Jones Industrial Average slipped 545.9 points (about 2%) to 25,052.83 on Oct. 11, after losing 831 points the day before. Tech stocks, which bore the brunt of Wednesday’s sell-off, tempered their losses on Thursday. Netflix, which shed more than 8% of its value on Oct. 10, dipped 1.5% on Thursday, closing at $321.15 each. Amazon fell 2.1% and Apple was down about 1%, while Facebook ended the day on a high note, rising 1.3% to $153.35 per share.

Cable distribution stocks fell between 1% and 2% for the day, with Charter being the biggest loser, dropping 2.6% ($8.11 each) to $302.02 per share, Comcast fell 1.75% (60 cents) to $33.68 and Altice USA was down 2% (36 cents) to $17.54 per share.

Programming stocks were a mixed bag. 21st Century Fox was the sole gainer -- rising 1.2% (52 cents) to $45.14. Other stocks fell in the 1% to 3% range, with Discovery and CBS down 3.2% and 3.1%, respectively, while Disney finished the day down 1.5%.

AT&T, which said Wednesday that it planned to launch another OTT streaming video service next year, fell 3.3% to $31.76 per share. 

The stock market closed another wild trading week, with the Dow Jones Industrial finishing up 330 points after a rollercoaster ride where the difference between its intraday high and low was more than 1,000 points.

Media stocks showed gains, but like the rest of the market still have a long way to go to make up past losses.

The Dow closed at 24,190, up 330 points and coming after a loss of more than 1,000 points on Thursday. Fears over possible coming inflation and higher interest rates added to the volatility, which isn’t expected to calm down soon. With Thursday’s declines the market officially entered correction territory, having dropped 10% since its last high on Jan. 26. For the week, the Dow was down 5.2%, its biggest drop since January 2016. Other indices like the S&P 500 (up 1.5% Friday) and the NASDAQ Composite (up 1.4% on Friday) were down 5.2% and 5.1%, respectively, for the week.

When the dust cleared about 16 of the 25 stocks in the media sector showed gains, led by 21st Century Fox (up 3.4% to $$35.73), Altice USA (up 2.8% to $19.21), MSG Networks (up 2.1% to $23.20) and The Walt Disney Co. (up 1.7% to $103.09). Google led tech stocks, up 3.6% to $1,037.78 each, followed by Facebook (up 2.6% to $176.11) and Apple (up 1.2% to $156.41).

Lionsgate, which reported earnings after the close on Thursday, fell 12.3% to $26.81 per share, mainly because the company lowered its three-year guidance, saying plans to restructure its film slate will pressure growth.

After weathering its single largest one-day drop ever, the Dow Jones Industrial Average closed up more than 567 points on Tuesday, regaining some of the losses of the past few days and fueled in part by gains in the media sector.

The Dow closed at 24,912.77, up about 567.02 points in what was a wild trading day. The market opened down 530 points but swung from positive to negative territory and back again throughout the day. That comes a day after the market plunged 1,175 points Feb. 5, on fears that higher interest rates and inflation were coming.

Some saw the opportunity to buy stocks on the cheap, and several stocks began to climb back from the hole they dug a day before. The market still has a way to go to regain the losses of the past seven day – it lost 1,100 points last week. But Tuesday’s increase was good news.

For media stocks, which were hammered in Monday’s market debacle, signs of a turnaround were evident. Discovery Communications led the sector, rising 4.7% ($1.06 per share) top $23.84 each; followed by AMC Networks, up 4.4% ($2.15 each) to $51.06 per share. Of the 25 stocks in the sector, 16 ended the day in positive territory.

Distribution stocks were mixed, with Comcast up 1.2%, Charter Communications down 1% and Altice USA (-0.4%) and WideOpenWest (-1%) down slightly. AT&T rose 0.6% (20 cents each) to $36.83 per share and Verizon gained about the same, up 0.65% (33 cents) to $50.83 per share. On a less positive note, Dish Network fell 3.3% ($1.41) to $43.32 per share.

Tech stocks also showed gains, with Netflix up 4.5% ($11.46) to $265.72; Apple up 4.2% ($6.54) to $163.03; Amazon up 3.8% ($52.84) to $1,442.84; Google up 2.3% ($24.80) to $1,080.60; and Facebook up 2.2% ($4.05) to $185.31 per share.

Continued queasiness over the potential for higher inflation rates continued to pound the stock market Monday, with the Dow Jones Industrial Average shedding more than 1,100 points – it’s largest single day decline ever – as investors headed for the exits. Cable stocks, which fell hard in last week’s sell-off when the Dow lost about 1,100 points over five days of trading, continued to falter.

The Dow closed at 24,345.75, down 1,175.21 points or about 4.6%. Other indices had similar declines -- the S&P 500 fell 113.19 points (4.1%) to 2,648.94 while the NASDAQ 100 closed at 6,495.92, down 264.37 points (3.9%). 

Every stock in the sector posted losses on Monday, ranging from a 1.1% ($7.98 per share) decline for Cable One to a 4.8% ($1.83 per share) dip for Liberty Global.

The declines swept across business lines, with programmers, distributors and tech giants all posting losses. Google closed at $1,054.66 per share on Monday, down 5.2% ($57.24 each), while Amazon fell 2.8% to $1,390 each, Netflix was down 4.9% to $254.27, Apple fell 2.5% to $156.49 and Facebook was off 4.7% to $181.61 per share.

On the distribution side, Comcast was down 4.7% to $36.66, Dish fell 4.4% to $44,72 each, Charter was down 3.9% to $372.50, AT&T dipped 3.8% to $36.63 and Verizon was down 4.1% to $50.50 each.

Programmers also had a rough Monday, with Discovery Communications down 4.3% to $22.78 per share, AMC Networks down 4.2% to $48.92 per share; Viacom down 3.4% to $31.14; and The Walt Disney Co. down 3.7% to $104.70 per share.

Most media stocks fell for a second day as earnings reports highlighted the risk that distribution revenue could be hurt if the pay TV bundle is coming undone.

The biggest losses came at Viacom, whose earnings report included a big drop in ad revenue. Viacom’s stock finished down 14 % at $44.10 a share.

AMC Networks fell 5% to $75.01 a share after its earnings report.

21st Century Fox, which lowered its earnings guidance for 2016 during Wednesday night’s earnings call (August 5), was down 6% to $29.06. And Crown Media, which owns Hallmark Channel, reported strong earnings on Monday, but its stock still fell Thursday by 8% to $4.64.

Other programmers whose share fell included Comcast, down 2% to $58.76; Disney, down 2% to $108.55; and Time Warner Inc., down slightly to $79.19.

See which media stocks bounced back at broadcastingcable.com.

Cable One, the Phoenix-based cable arm of Graham Holdings, is slated to begin when-issued trading on the New York Stock Exchange on June 11, giving investors some insight into what Wall Street really thinks about small-market MSOs.

Graham Holdings announced plans to spin off Cable One in November, and the stock will officially trade on NYSE (under the symbol “CABO) on July 1. But in the meantime, investors will get an early glimpse of how the market could value the company via when–issued trading under the symbol “CABO WI.”

According to some people in the cable financial community, some investment bankers estimate the market could value Cable One as high as 8 times to 8.5 times forward looking cash flow. That would be a pretty high public multiple -- other cable stocks trade in the 7 times range -- but would be in line with the 8 times to 10 times multiples paid for public and private cable companies recently.

When-issued shares can be bought or sold like ordinary securities, except that transactions do not settle until the stock is formally issued. The attraction: trading in when-issued shares usually require a small down payment of about 25% of the value of the shares and no margin or loan debt is needed for the balance until the settlement date, which can be weeks in the future.

Cable One has been at the forefront of the battle over high-programming costs, dropping Viacom’s suite of networks – including MTV, Comedy Central, Nickelodeon and VH1 – 14 months ago after the two could not reach a carriage deal. Cable One has claimed that Viacom demanded carriage fee increases of more than 100% despite ratings declines at many of its channels. Viacom has claimed it is merely seeking fair compensation for its content.

Dropping Viacom has taken a chunk out of Cable One’s programing expenses. According to its financial statements, programming costs have dropped “significantly” since it dropped Viacom more than a year ago, but so have its customer rolls. Graham’s 10-Q first quarter financial statement filed in May stated that Cable One has shed about 20% of its video customer base (to 421,331 from 524,563 in March 2014) in the past 12 months and has placed a lower emphasis on video product sales.

“Due to rapidly rising programming costs and shrinking margins, video sales now have less value and emphasis (video PSUs were down 20% over the first quarter of last year) and programming costs have been reduced significantly,” Cable One said in the 10-Q. The company added it is focusing more on “higher lifetime value customers who are less attracted by discounting, require less support and churn less.”

The spin will be a tax-free distribution to Graham shareholders of record as of June 15, who will receive one share of Cable One stock for every Class A and Class B Graham Holdings share they own.  Earlier in June, Graham announced that Cable One also will issue about $550 million in debt, which will be used to pay a one-time cash dividend to Graham Holdings.