Google to Take on Cable TV Stocks: Short-Sellers Smell Blood
Google (NAS: GOOG) could be making moves to break into the telecommunications triple-play: cable television, telephone, and high-speed Internet.
The $150 billion a year pay-television market has an understandable lure for Google. A venture into the television market offers a way to expand into pay video and telephone services and has the potential to turn advertising and distribution on its head.
"This would put Google in a position where it could not only sell subscriptions to the pay TV channels, but sell ads on those channels as well. It would also put its video-on-demand services in a sweet spot, perhaps moving many of its video capabilities over to the streaming-video Internet side, rather than the conventional cable TV business model," writes Charlie White of Mashable.com.
The company has already announced plans to build a fiber-optic high-speed Internet service in Kansas City, Missouri and Kansas City, Kansas. Could this be the first step?
White adds, "Google might even be able to turn YouTube into a sort of 'virtual cable TV,' where customers could pick and choose the programs they want, and it might be available on a national, or even international scale."
So, which cable TV stocks could be in trouble?
For ideas, we collected data on short floats, and identified a list of cable TV stocks being targeted by short-sellers. In other words, short-sellers think these companies are in trouble.
Do you agree with the bearish opinion on these stocks? Use this list as a starting point for your own analysis.
List sorted by short float. (Click here to access free, interactive tools to analyze these ideas.)
List compiled by Eben Esterhuizen, CFA:
1. Crown Media Holdings (NAS: CRWN) : CRWN owns and operates pay television channels in the United States and Puerto Rico. The company primarily operates the Hallmark Channel and the Hallmark Movie Channel that provide entertainment programming for adults and families. The company's short float stands at 15.20%, which is equivalent to 37.45 days of average volume.
2. TiVo (NAS: TIVO) : TiVo provides technology and services for television solutions, including digital video recorders (DVRs) and connected televisions in the United States and internationally. The company's short float stands at 11.70%, which is equivalent to 4.24 days of average volume.
3. Virgin Media (NAS: VMED) : Virgin Media provides entertainment and communications services in the United Kingdom. The company's short float stands at 8.82%, which is equivalent to 4.97 days of average volume.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above.
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