Another Comcast Spinoff, AI Spending Risks, and Drill Down on Dislocations 6/29/26

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**Kelly Evans** (0:58)
You're listening to The Exchange. Here's today's show.
Thank you very much, Frank. The Nasdaq is rallying in spite of weakness in the memory trade. The Dow's newest component is up 4% today and the Mag 7 are making a stand. I'm Kelly Evans and welcome to The Exchange. The MegaCap Tech names are outperforming today. Amazon Alphabet up more than 3%.
Alphabet, the newest Dow member, is now leading the way. Microsoft Micron and Sandisk are selling off though. You can see those declines have paired from the session lows. Sandisk still down about 3%, but Micron right around the flat line. We're gonna have a lot more on that in just a moment. Elsewhere, Comcast announcing it'll spin off NBCUniversal. And that has media and telco names on the move. Also, the Supreme Court ruling 5-4 that Lisa Cook can stay on the Federal Reserve while also agreeing the president can fire FTC commissioners at will. But let's begin with the media movers today. You can see on your screens there, Comcast earlier was up as much as 24%.
Well that's paired back to just 6.5% now. After the company announced it'll spin off NBCUniversal, rival charter shares are up more. They're up about 11%. The theory is that this could pave the way for a merger between these two internet giants. So what does our first guest think about that? And what does it mean for the rest of the space, including the streaming stocks? Let's bring in Oppenheimer's Tim Horan and CNBC media and sports reporter Alex Sherman. It's great to have you both here. Tim, I'll start with you. Suddenly this is looking like a pretty muted response in shares of Comcast.

**Tim Horan** (2:32)
Yeah, well, obviously the 20% I think was a knee-jerk reaction. The stock is kind of very on their own by investors. I think it's pretty heavily shorted. So the initial knee-jerk reaction was to cover those shorts.

**Kelly Evans** (2:44)
That said, if this, look, the shares have been struggling for a long time. You covered the stock. I don't have to tell you.
Would you expect a bigger move here? They're clearly looking to do something more transformational than what they did with this little offering last year of spinning out Versant. It sounds like they're dissatisfied. Comcast has continued to underperform. It's now spinning out all of NBCUniversal, the right move.

**Tim Horan** (3:08)
It's definitely the right move strategically. It's only about 20 percent of the eBitDA of the company, so it's not that big of a transaction. But it's been a bit of a disaster owning these assets. They've gotten cut in half since they acquired them over roughly a decade ago, two different transactions. The multiples are down, the eBitDA is down quite a bit. There's a lot of channel conflict, having both the distribution channel and a content creator in the same place.
This is clearly the right move. I think people now are waking up to the fact though that maybe Comcast does something else. Like you said, maybe they buy Charter or maybe the media business buys other assets. The management team is downplaying that, but they have to do something. They're both basically in secular decline at this point, and they both probably need to jumpstart something.

**Kelly Evans** (3:52)
Alex, let me turn to you because you've said this is creating a lot of ripples already throughout the media and telecom space.

**Alex Sherman** (4:00)
Well, yeah, you pointed out the first one, which is Charter. I mean, it's not usual that you get news that a company is doing a spin, and then the share price of the company that rose the highest was not a company involved in the transaction whatsoever. And yet, that's what we saw with Charter, which was up earlier in the day about 25%. So the pare down that you've seen in Comcast is mirrored by Charter in addition to both companies being well shorted, as Tim just said. I think it's also possible that investors have kind of become more sober with the M&A possibilities, at least in the near term. Like this transaction is going to take a year to complete. Even after that, for tax purposes, there's usually another year or so waiting for a deal gets done. And even beyond any of those things, it really is not a slam dunk at all that a Comcast Charter merger would be allowed by regulators. Think back 11 years, Comcast tried to buy Time Warner Cable. That company was eventually swallowed up by Charter. So most of Charter today is Time Warner Cable. That deal was blocked or was about to be blocked by the Department of Justice. Then Comcast backed away. So I think it's very much up in the air whether or not a Comcast Charter merger this time around would be approved by regulators. And they don't even need to be also, it's not only the federal regulators that need to approve it, but also from a state by state local commission, cable commission standpoint, it would need to get state approval. We're seeing the Paramount Warner deal, the last step it needs is to get state approval at the AG level. So there is multiple different regulatory levels that this deal would need to go through. And I think that also may be tamping down Wall Street's immediate reaction today.