Christmas came early for media and communications companies, several of which ended the week of Dec. 22 with stronger gains than broader market indexes.
TV networks saw considerable movement as investors continued to digest the implications of Walt Disney Co.'s move to acquire a variety of TV and film assets from 21st Century Fox Inc. Discovery Communications Inc. was one of the biggest winners of the week among network owners, as its shares soared almost 12% over the five-day week.
Bank of America Merrill Lynch analyst Jessica Reif Cohen upgraded Discovery to "buy" from "neutral," citing the company's valuation and upside from its pending merger with Scripps Networks Interactive Inc., TheFly.com reported Dec. 21. Reif bumped her price target for Discovery to $30 from $26 per share.
Scripps shares gained 2.6% on the five-day chart.
Other TV network operators also felt the Christmas cheer. Viacom Inc. shares gained 6.2% for the week. By contrast, Fox and Disney each saw their prior week's stock momentum slip, with Fox edging up less than 1% and Disney down by almost the same for the five days ended Dec. 22.
Comcast Corp. joined AT&T Inc. and other companies in cheering on the passage of a massive U.S. tax reform bill by announcing special bonuses. In addition to the tax bill, which reduces corporate and other taxes, Comcast cited the FCC's repeal of previous net neutrality regulation.
At Comcast's content business, NBC Sports agreed to buy Time Inc.'s Sports Illustrated Play software app, according to a Dec. 21 New York Post report. Universal Pictures rejiggered its terms with Redbox Automated Retail LLC to release Universal content day-and-date, according to a Dec. 21 Deadline Hollywood report. NBCUniversal, LLC agreed to an African distribution deal with growing international digital video platform iflix.
Comcast shares climbed 3.9% for the trading week.
Elsewhere, publishing company TEGNA Inc. on Dec. 18 announced a $325 million all-cash agreement to acquire Midwest Television Inc.'s San Diego broadcast stations. TEGNA will use available cash and borrow under its existing credit facility to fund the deal, which is expected to close in the first quarter of 2018.
While S&P Global Ratings revised TEGNA's credit outlook downward on the deal news, investors still bid shares up 4.1% for the week ended Dec. 22.
Time Warner Inc. settled a tender offer for outstanding debt securities for Time Warner and Historic TW Inc. earlier than planned. The company validly tendered about $3.5 billion in debentures. The company also extended the deadline for the termination date on its pending acquisition of AT&T Inc. to June 21, 2018, from April 22, 2018. The extension follows unsuccessful settlement talks between the companies and the U.S. Department of Justice.
Time Warner shares climbed 4.7% for the trading week, while AT&T shares added 1.2%.
Investors continued to speculate about the future of social media operator Twitter Inc., which saw shares jump 9.8% for the five trading days ended Dec. 22. The social media company got a boost early in the week when J.P. Morgan analyst Doug Anmuth on Dec. 18 upgraded the stock to "overweight" and named it a top pick among small-to-mid-cap companies for 2018, according to CNBC.