An activist investor, Trian Fund Management, has accumulated a $900 million stake in Comcast and is in conversations with the cable company’s management about how to boost its stock price according to reports.
Trian, founded by Nelson Peltz, Ed Garden and Peter May, disclosed owning 7.2 million Comcast shares at the end of the second quarter and has increased its holding to about 20 million shares, according to the Wall Street Journal.
“We have recently begun what we believe are constructive discussions with Comcast’s management team and look forward to continuing those discussions,” Trian said in a statement, according to the paper.
A Comcast spokesman declined to comment.
Trian, which managed $8.8 billion for investors, is likely to encourage Comcast to sell some of its assets and otherwise operate more efficiently. Trian had urged a breakup of Time Warner in 2016.
Some Comcast units, particularly its recently acquired Sky business, theme parks and movie studios, have been hurt by the COVID-19 pandemic. Other parts of the company, such as its broadband business, have fared well.
Comcast stock jumped nearly $1 a share in last minute trading before closing at $44.68, down 1.28% on Monday.
“We believe that Trian's focus on long-term shareholder value at large, growing franchise businesses makes it a potent new voice at Comcast,” said Peter Supino, analyst at Sanford C. Bernstein in a research note Monday.
Supino noted that he’d published an open letter to Comcast CEO Brian Roberts in June arguing that “Comcast's stock is demonstrably under-valued and that the pendulum of investor confidence now under-appreciates Comcast's strategic intelligence and commitment to long-term value creation.”
There are several ways for Comcast shareholder to benefit, Supino said, and the scenario that offers the greatest long-term upside potential is spinning out its NBCUniversal and Sky units, Supino said.
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