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Cable stocks could jump
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June 9, 1997: 7:49 a.m. ET
Two transactions may increase speculation that activity could pick up
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NEW YORK (CNNfn) - Cable stocks will likely get a boost from consolidation activity in the wake of two high profile transactions.
Microsoft Corp. has held talks to invest about $1 billion in Comcast Corp. of Philadelphia in exchange for an equity stake, the Wall Street Journal reported on Monday.
The deal could expedite the shift by cable companies to expand their networks to allow high-speed Internet access to homes, a move long advocated by Microsoft Chairman Bill Gates. In addition, the investment will strengthen Microsoft's influence on cable companies in the evolution of high-definition digital television.
Comcast's stock (CMCSA) in Nasdaq trading on Friday rose 15/16 to 18-1/4 while Microsoft (MSFT) jumped 3-5/8 to 124.
Separately, Cablevision Systems Corp. is close to reaching an agreement to buy a large number of New York-area subscribers from Tele-Communications Inc. Cablevision is expected to pay about $400 million in new stock, plus assume $675 million of TCI debt, the Journal reported on Monday.
TCI is offering to contribute about 820,000 subscribers in the New York area, a block that fits strategically with Cablevision's biggest and most lucrative markets including those in Rockland and Westchester counties in New York.
TCI stock (TCOMA) Friday rose 5/8 to 15-1/16 on the Nasdaq. Cablevision (CVC) shares rose 3/4 to 34-5/8.
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