Meta and Microsoft Fall, Apple and Amazon Earnings Countdown, New Starbucks CEO's Turnaround Message 10/31/24

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

SPEAKER_2 (0:07)

All right.

SPEAKER_3 (0:07)

Good Thursday morning.

Scott Wapner (0:08)

Welcome to Squawk on the Street. I'm Scott Wapner with Jim Cramer, Post 9 at the New York Stock Exchange. David is on assignment. Carl has the morning off. Want to show you what futures are doing right now, digesting a whole bevy of earnings this morning. We would be lower, a drag from both Meta and Microsoft. And we are going to begin though with that story that Squawk Box was just covering this news developing around our parent company, Comcast. And for that, let's bring in who else? Our own David Faber, who's going to give us more. David is on the phone. But David, what do you know here?

David Faber (0:43)

You know, Scott, of course, busy day for everybody here. And you guys got a lot to get to. But certainly this is something that I guess many shareholders of Comcast and others in the entertainment industry and cable networks industry would have anticipated as a possibility.

What we know is all, at this point, is what was just said by Mike Cavanaugh, who runs NBCUniversal on the conference call for what also were, by the way, fairly strong earnings for Comcast and getting a good response in the stock market, at least in the early going, obviously, before trade. But he said that the company is exploring whether by creating a new, and this is an important usage here, well-capitalized company owned by shareholders, so spun off to shareholders and comprised of a strong portfolio of cable networks, would position them to take advantage of opportunities in the changing media landscape and create value. So what are they saying? Well, they're saying that they're at least exploring, and my understanding is it is very early here. They chose to say it on the call as a result of the fact that it most likely would have leaked. And so they're even at the point where it's not clear to me that they've hired advisors, for example, but they are exploring the possibility of spinning off all of the cable networks, including, by the way, the one that we work for. But you're talking USA, Bravo, E, Oxygen, CNBC, MSNBC, the Golf Channel, into a new well-capitalized company that would then be able to potentially pursue strategies that it is not capable of doing right now. We all know, Jim and I talk about it endlessly with Carl, of course, as you well know, about the continued declines in the cable universe, the cord cutting that actually continues at a pace that many had thought would have abated by now, but only continues perhaps at even a stronger rate than had been anticipated, certainly. You've got companies that still generate a good amount of cash flow, would conceivably trade at very low multiples, though, given their lack of growth, but nonetheless might be able to find an audience amongst investors, and then go out and maybe merge with others or do some other things that could conceivably enhance their value. At the same time, guys, I gotta say, you think about what they're not or considering spinning, which includes NBC News staying with the parent, Peacock, the studio stays with NBC Universal. It's not completely clear to me how you can cleave entertainment networks from the studio and Peacock, in other words, USA and Bravo and E, and how you can cleave CNBC and MSNBC from the news network as well. That's certainly something that will be studied, and I guess we'll find out in the coming weeks and months whether, in fact, that is a real possibility. So, that's kind of what we know at this point.

Jim Cramer (3:23)

David, what happens if they're trying to separate the divisions that are not making that much money from the divisions that are making a lot of money? And the reason I mention this is because we're making a lot of money. I don't understand why we wouldn't go with NBC News.

David Faber (3:38)

Well, as I understand it, Jim, the plan being contemplated and studied, and again, I can't stress enough, this is early. The company chose to announce it as a result of the fact that it didn't want it leaking out, which is often the case. As I understand it, NBC News would stay with stand-alone NBC Universal, which would, if this plan were to happen, no longer include many or all of its cable networks. Although again, the plan could change to perhaps including only the entertainment cable networks being spun and news being kept or vice versa.