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Netflix scores big on sub gains; T-Mobile swings up amid M&A talk

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Netflix scores big on sub gains; T-Mobile swings up amid M&A talk

Speculation that Donald Trump's inauguration as president could usher in a more M&A friendly environment may have helped fuel a boost for T-Mobile US Inc. shares during the week ended Jan. 20.

Sprint Corp. could again attempt a merger with T-Mobile, noted UBS analyst John Hodulik, as the CEO of its parent SoftBank recently had a meeting with Trump.

Some analysts also speculated that T-Mobile could emerge as a winner from the FCC's closely watched spectrum auction. The regulator said Jan. 18 that its Final Stage Rule had been satisfied based on the forward auction bids received that day, pulling the long-running auction closer to a conclusion.

Shares of T-Mobile shot up 5.04% from market close Jan. 13 to market close Jan. 19.

"I think the [T-Mobile stock] move is due to M&A speculation that the end of the auction combined with the new administration and [SoftBank CEO Masayoshi] Son's trips to Trump Tower all add up to Sprint taking another run at T-Mobile," Hodulik told Investors Business Daily on Jan. 19.

Meanwhile, in media and entertainment, shares of Netflix Inc. also spiked as the company announced that it gained 7.1 million new net members around the globe during the fourth quarter of 2016.

The growth represented a new record for the streaming service, beating a forecast of 5.2 million. Executives noted that the growth specifically rested on the addition of 5.1 million international members.

"The big picture is remarkably steady," CEO Reed Hastings said on an earnings call Jan. 18, citing growth in Latin America, Europe and Asia. "We are just getting started."

The company ended the week with shares up 3.52% from market close Jan. 13 to market close Jan. 19.

Coming off a year of boardroom drama, another media company, Viacom Inc., also saw a boost. Well-received comments by newly appointed CEO Bob Bakish on Jan. 18 at the NATPE content conference in Miami pointed to the need to break down silos between the conglomerate's properties, while also stressing that Paramount Pictures and other assets are no longer up for sale.

"Let's face it, the company needs a little bit of work," he told conference attendees. "I think one of the missed opportunities was some of our programming felt a little too scattered. We really don't have critical mass in some of the networks, so we need to focus that a bit more."

As the company stock began to climb, Paramount also announced deals with two Chinese film companies to co-finance the studio's full slate of films for the next three years. Viacom shares rose 2.84% from market close Jan. 13 to market close Jan. 19.

Turning to pay TV operators, Cable One Inc. also soared following the announcement of its purchase of NewWave Communications for $735 million in cash. The company said Jan. 18 that it expected to fund the deal with $650 million of senior secured loans and cash on hand, with the acquisition expected to be completed by the second quarter. Cable One's shares jumped 4.32% from market close Jan. 13 to market close Jan. 19.

In the harder-hit world of newspaper publishing, however, McClatchy Co. saw a ratings downgrade from Zacks Investment Research that moved the company to a sell from a hold rating. Shares of McClatchy fell 5.36% from market close Jan. 13 to market close Jan. 19.

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