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Time Warner Cable became a publicly traded company on Tuesday. As the nation's second largest cable company behind Comcast, they could start publicly trading as early as March 1. Time Warner, Inc. will continue to own and control a majority of the company. This comes after Adelphia Communications Corp.'s bankruptcy plan took effect. Adelphia, once the fifth-largest cable operator in the country, went bankrupt five years ago. Adelphia received $8.9 billion in cash and 156 million shares of Time Warner Cable on July 31, 2006 as part of the payment for Adelphia Cable. This will give Adelphia stakeholders approximately 16% of the company. Time Warner will retain the remaining 84% ownership of Time Warner Cable. Shares to Adelphia bondholders should begin being distributed within the next few days according to Time Warner. Time Warner had initially planned to take their cable unit public by the more traditional route after filing an S-1 statement last year. Filing an S-1 statement is the normal course of action when a company plans to trade publicly. That was withdrawn on Tuesday as Time Warner decided not start trading publicly via the traditional method since it would take longer and carry more expense than through the current bankruptcy organization. Time Warner Cable stock has been sold since last month on a "when issued" basis at a price of $41 per share under the ticker symbol "TWC." When issued means that the trading of a stock is being tracked to help determine the eventual opening price. There is expected to be a high demand for the Time Warner Cable stock although it will likely trade at a discount to market leader Comcast. Based on the current price of $41 the company would valued at approximately $40 billion. Glenn Britt, the president and CEO of Time Warner Cable, says that being a publicly traded company will provide greater growth opportunities and flexibility for the company. Time Warner Cable is going public at a time when shares of cable companies are becoming popular again with investors. This is in part due to the success of cable companies being able to sign up customers for their three offered services of cable television, high-speed internet service, and phone service. These packaged services bring in business for cable companies and also help customers from leaving cable for satellite TV and other services offered by phone companies. Many phone companies are now starting to enter the cable television market as well. Sources: http://money.cnn.com/2007/02/13/news/companies/twc/?postversion=2007021310 http://sanantonio.bizjournals.com/sanantonio/stories/2007/02/12/daily11.html |
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