Cable Stocks Fall In Q2

Do you want to know how bad it has been for cable stocks? NextTV reports so bad that even the apparent removal of one of the sector’s biggest albatrosses — the threat of net neutrality regulation — wasn’t enough to move the needle into positive territory as distributors, hampered by fears of slower broadband growth and stiffer competition, shed about 13% of their value in Q2.

Overall, cable distribution stocks — Comcast, Charter Communications, Altice USA and Cable One — saw their collective share prices fall 12.7% during Q2. The biggest loser was Altice USA, which fell 25.9% between March 31 and June 30, as fears of another quarter of broadband subscriber losses took hold. Other stocks didn’t fare much better — Comcast was down 15.7% in the quarter, closing at $39.24 per share on June 30, followed by Charter (down 14.1%) and Cable One (down 11.9%).

The stocks were down 48% for the first six months of the year, as a steep decline in Altice USA’s share value sunk the rest of the sector. Altice USA shares were down 42.8% for the first six months of 2022, followed by Charter (down 28.1%), Cable One (down 26.9%) and Comcast (down 21.2%).

A combination of fears that the slowdown in broadband subscriber growth will continue longer than originally expected, coupled with an overall market malaise (the S&P 500 entered into bear market territory in June), rising inflation and worries that the country may be headed into another economic recession all helped drive down stocks. For what it’s worth, every sector has had to weather some declines as the major indices have slipped over the past several months. The S&P is down 20% so far this year — its lowest point in more than 50 years -- while the Dow has slipped 15% and the NASDAQ Composite fell 30% in Q2.

Also: Has Cable Broadband Hit the Wall?

Content stocks fared no better. Warner Bros. Discovery, the new entity created through the merger of Discovery Inc. and AT&T’s WarnerMedia assets, fell the hardest, down 46.1% for the quarter and closing June 30 at $13.42 each. The Walt Disney Co., home of the Disney Plus streaming service, dipped nearly 31% during the period, followed by Paramount Global (down 34.7%), AMC Networks (down 28.3%) and Fox Corp. (down 18.5%). For the full year, Warner Bros. Discovery fell 43%, followed by Disney (down 39%), Paramount Global (down 18.2%), AMC Networks (down 15.4%) and Fox (down 12.3%).
Telcos Ride High