Cable Technology Feature Article
Cablevision Stock Shares Lowest of Any Cable Company, Sparking Buyout Rumors
By Oliver VanDervoort, Contributing Writer
Anyone who plays the stock market knows that from one day to the next, it can be extremely hard to explain why one company does well while another struggles. Some truly odd factors can come into play when it comes to valuing a certain firm's stock market strength. This was never made clearer than last week when RIM's stock actually began to surge because there were rumors that there was about to be a change in leadership. Compare that with big time cable company Cablevision's stock price, which has plummeted mainly because they actually shuffling things up at the top.
Cablevision Systems (News - Alert) Corp. is now the cheapest cable company for those who are looking to own a little stock in that particular sector. That company's stock price plummet seems to be directly attributable to Cablevision's COO Tom Rutledge stepping down last month. The stocks have actually tumbled so low that it is starting to approach record levels for a cable company, let alone for any company that has been publicly traded. The New York based cable company has now seen its stock prices tumble to $23 a share, making it ripe for a takeover by any company that might want to add a company of that ilk to its portfolio.
The 58-year-old Rutlege stepped down as Chief Operating Officer of Cablevision on December 15th without much of any explanation as to why he was making the decision. Rutlege had been COO of the company since 2002 and under his stewardship the company had focused much closer on cable infrastructure since they spun off subsidiaries like the MSG Network and AMC Networks. It appears that Rutlege was a known and wanted commodity considering that the fourth largest cable company in the US almost immediately brought him aboard as CEO. Cablevision is currently the fifth ranked cable company in America, meaning that less than a week after his resignation, Rutlege had actually moved up the ladder.
Most feel that the recent stock plunge could make Time Warner (News - Alert) decide the time is right to acquire their lesser competitor. Time Warner is probably the natural player and could probably bid the highest,” said analyst Todd Lowenstein. “It’s a crown jewel asset. You’re not buying a rough-cut diamond.”
Edited by Juliana Kenny