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Stock Jocks Love Time Warner Cable
Though what's good for investors quite often isn't good for you...
by Karl Bode 10:08AM Tuesday Jan 12 2010
Fresh off of their split from Time Warner and with plans this year to change their name, Time Warner Cable this week has caught the eye of stock watchers, with Barron's praising the company and their "copious amounts of cash." From the investor perspective, Time Warner Cable is doing everything right: higher consumer prices, continually lowered CAPEX, with a net income that for 2010 could jump 21% to $1.3 billion because of higher revenue and improving operating margins. Of course Stop The Cap steps in to remind us that this is the same company that last year stated a shift to low caps and high overages was the only way to remain financially viable:
quote:
Despite the company’s falling broadband costs, falling capital spending, and increasing prices, some Time Warner Cable executives still approve of taking earnings to an even higher level with Internet Overcharging schemes that would change the “pricing model” for broadband service. Despite company claims such changes would save customers’ money, relentless price increases in many communities — even higher for those on Road Runner’s economy tiers, prove otherwise.
Keep in mind that Time Warner Cable has only deployed DOCSIS 3.0 upgrades in portions of New York City. They're in a unique position to focus primarily on pleasing investors, given they don't face substantive competition. Or as stock jock Craig Moffett puts it in the Barron's piece: "At a time when demand for broadband is going through the roof, Time Warner is the only game in town in a lot of its footprint." As such, they can do what they'd like, be it higher prices, low caps, or limited next-gen expansion.

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cpsycho

join:2008-06-03
HarperLand

Not about pleasing customers

Yes spending more money on a service is actually saving you money. These companies think people must be stupid.

I wish CEO's were not receiving bonuses based on stock prices. Then we might actually see real pricing.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

1 recommendation

humpty dumpty

They're in a unique position to focus primarily on pleasing investors, given they don't face substantive competition. Or as stock jock Craig Moffett puts it in the Barron's piece: "At a time when demand for broadband is going through the roof, Time Warner is the only game in town in a lot of its footprint." As such, they can do what they'd like, be it higher prices, low caps, or limited next-gen expansion.
---------------------------------

Until the price gets too high and consumers cut the cord.. literally! Day traders have a short attention span & tunnel vision. Just look at the wonders they do for your transportation & energy, healthcare, economic development, public policy and so forth! a day will come when certain industries (not necessarily cable & telco, but) will be forced to be HIGHLY REGULATED, NON-PROFITS and BANNED FROM BEING PUBLICLY TRADED COMPANIES. The pendulum will swing back & morality will be legislated back into sanity.

TheRabbit

@hp.com

Re: humpty dumpty

I hope your right.. One of the biggest problem that I see, is ppl in general are to busy with life to really notice anything until their pocket books are impacted. I hope we all start waking up and demanding more for our hard earned money. I'm a little tired of always paying more for less..

Dryvlyne
Far Beyond Driven
Premium
join:2004-08-30
Newark, OH
When you're stuck in an area served by a duopoly (like me) your screwed though. I simply choose TWC as my ISP because I think their the lesser of 2 evils, certainly not because they're doing anything right!
--
In relative terms life is shorter than the blink of an eye. Remember that each and every day because in the end it's not about what you've done but how you've lived.

Bill Neilson
Premium
join:2009-07-08
Arlington, VA

Are there really people still left

that believe a company is doing something to save us money?

Really?

axiomatic

join:2006-08-23
Tomball, TX

Of course

Of course investors love Time Warner Cable. They haven't spent very much on providing a service to their customers and that means there is money left for everyone invested to get a piece of the pie.

Unfortunately you can only do this for a few years then your company is so "behind" on technology that it becomes nonviable to continue competitively.

So to the investors in Time Warner, enjoy your pie, but I wouldn't hang around at the table for second helpings or you could be left doing the dishes.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: Of course

»Stock Jocks Love Time Warner Cable
They're in a unique position to focus primarily on pleasing investors
They SHOULD be pleasing investors. THEY OWN THE BUSINESS AND ARE IN IT TO MAKE MONEY.

And they are in it to please customers. MOST OF THE CUSTOMERS. You can't please all your customers because some of them want something for nothing and will NEVER be happy no matter what you do.

And if the customers continue to buy the service, then I guess they are doing something right, ehh??
--
My BLOG .. .. Internet News .. .. My Web Page


karlmarx

join:2006-09-18
Chicago, IL

Re: Of course

Yes, please explain why a company should be allowed to rape the customer, to MAKE MONEY, when it's so obviously NOT in the interest of the customer or the country? It's attitudes like TWC's that lead the way for people to argue for the Nationalization of said broadband services, because first and foremost, the company's bottom line SHOULD be focused on IMPROVING the community, not taking money from it.
--
Remember 1 in 4 people are retarded. 25% of Americans are Republican. Coincidence? I don't think so.
rradina

join:2000-08-08
Chesterfield, MO

Re: Of course

Review this article about the infamous Ford vs. Dodge turn of the 20th century case.

»en.wikipedia.org/wiki/Dodge_v._F···_Company

AlfredNewman

@chase.com
As stated in the above article, usually they are the only game in town and do as they please. Not everyone has a wide variety of broadband ISPs to choose from therefore stuck with what they got and has it ever occured with you that some of the people that are upset about their service is because TWC refuses to upgrade their network. It appears to me that is a company is in business to please its investors and customers that it make an effort to do so? Doesn't seem to be the case with TWC. IMHO. And there have been plenty of articles posted on this site to back this data up, if you want it you can search for it.
rradina

join:2000-08-08
Chesterfield, MO
said by FFH:

»Stock Jocks Love Time Warner Cable
...
And if the customers continue to buy the service, then I guess they are doing something right, ehh??
Depends on whether or not competitive checks and balances are in play. If what Craig Moffett says is true, they lack competition in most of their footprint.

If a service station is the only choice for 100 miles in any direction, is it accurate to base the quality of their service on sales?

I agree that they can run their business however they like and return as much as possible to investors. However, if they have an unregulated monopoly, we should not assume they are doing something right based solely on sales.
33358088
Premium
join:2008-09-23
kudos:2
said by FFH:

»Stock Jocks Love Time Warner Cable
They're in a unique position to focus primarily on pleasing investors
They SHOULD be pleasing investors. THEY OWN THE BUSINESS AND ARE IN IT TO MAKE MONEY.

And they are in it to please customers. MOST OF THE CUSTOMERS. You can't please all your customers because some of them want something for nothing and will NEVER be happy no matter what you do.

And if the customers continue to buy the service, then I guess they are doing something right, ehh??
yea sure you really need to wake up pal
the customers don't have options for anyhting else , seriously you add a major player into that market and watch time warner get real cheap and suddenly get lots more speed. IF YOUR A MONOPOLY you dont need to care what the hell anyone thinks.

and when the revolution comes the lawyers were the first to go
ElJay

join:2004-03-17
Reviews:
·Time Warner Cable
It's also smart to keep the customers happy so there are future profits to be paid out. Cannibalizing and gouging your long-term customer base for slightly higher short-term profits seems like a very bad idea to any business that wants to stick around. People will flee to a competitor (if they can). Most businesses act this way since nobody has an outlook longer than a quarter.

These are the same brainchildren that offshore all the jobs and then wonder why US consumers don't have money to buy $100/mo cable subscriptions.

vzw emp

@qwest.net
TWC already makes a healthy profit and, according to the article, it stands to get even healthier. Their current behavior disturbs me for a couple of reasons:

1. They have virtually no competition. If my grocery store charges to much I can go to one of 3 different competitors. Same with the auto mechanic, the bank, my doctor and so on. But if Time Warner decides to gouge me on the price just to make more of a profit, my only option, God forbid, is AT&T, and they don't compete on price (the only factor most people give a damn about).

2. TWC not only enjoys a lack of competition, but they (along with other ISP's) have demonstrated a willingness to fight any potential competition from gaining a foothold through less than honorable means. They have shown this much in their opposition to various muni fiber projects. In those situations people voted, both with their wallets and at the polls, to move away from TWC with mixed success.

3. Saying they please "most of the customers" is BS, pure and simple. Again, this is where the lack of competition comes in. If I was born on a desert island where all the women looked like Susan Boyle I'd be happy with what I had. I'd have to be. But if a boat pulls up one day and a group of Sports Illustrated swimsuit models comes to cavort on the sandy beaches, you can bet my opinion would change. Lesson: There is a huge difference between being satisfied and not having an alternative. As soon as another choice presents itself TWC is out of luck.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

1 edit
said by FFH:

»Stock Jocks Love Time Warner Cable
They're in a unique position to focus primarily on pleasing investors
They SHOULD be pleasing investors. THEY OWN THE BUSINESS AND ARE IN IT TO MAKE MONEY.

And they are in it to please customers. MOST OF THE CUSTOMERS. You can't please all your customers because some of them want something for nothing and will NEVER be happy no matter what you do.

And if the customers continue to buy the service, then I guess they are doing something right, ehh??
Soemthing for nothing? Please do explain.

The customers continue the buy the service because they have no other choice.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: Of course

said by sonicmerlin:

said by FFH:

»Stock Jocks Love Time Warner Cable
They're in a unique position to focus primarily on pleasing investors
They SHOULD be pleasing investors. THEY OWN THE BUSINESS AND ARE IN IT TO MAKE MONEY.

And they are in it to please customers. MOST OF THE CUSTOMERS. You can't please all your customers because some of them want something for nothing and will NEVER be happy no matter what you do.

And if the customers continue to buy the service, then I guess they are doing something right, ehh??
Soemthing for nothing? Please do explain.

The customers continue the buy the service because they have no other choice.
Sure they do. Not use the service at all.
--
My BLOG .. .. Internet News .. .. My Web Page


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
The point being, normally the way to please investors is to please CUSTOMERS and then gain business and more profits and sell new options, thereby pleasing investors. However this assumes they have competition to worry about.

When in a position where their "Footprint" has limited competition, they can skip pleasing customers and go straight to pleasing investors by making more profits--- by simple sticking it to customers who have the only choice of pay up or do without, period.

Investors love monopolies. They're sure fire money makers.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
Heated Man

join:2009-06-18
Cleveland, OH
said by FFH:

»Stock Jocks Love Time Warner Cable
They're in a unique position to focus primarily on pleasing investors
They SHOULD be pleasing investors. THEY OWN THE BUSINESS AND ARE IN IT TO MAKE MONEY.

And they are in it to please customers. MOST OF THE CUSTOMERS. You can't please all your customers because some of them want something for nothing and will NEVER be happy no matter what you do.

And if the customers continue to buy the service, then I guess they are doing something right, ehh??
Amen. There are always whiners who want to pay a $1. And they would still whine. Especially on this website.
rradina

join:2000-08-08
Chesterfield, MO
But by that time, they will have sold the stock leaving our 401k plan mutual funds holding the bag.

badtrip
I heart the East Bay
Premium
join:2004-03-20
Albany, CA
Watch out when MSM outlets are pushing particular stocks, IMO.

In the US stock market, the average trader is nothing more than a stooge meant to take the brunt of the losses after CEOs and COOs (who know whats coming down the pipe), cash in their options during these MSM induced buying frenzies.

Case in point ATVI....
iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
·Comcast
My point exactly. TWC has said that they will be launching DOCSIS 3 in the San Antonio area (which probably means here in Fredericksburg soon after) the first half of this year. One problem: they don't seem to have D3 nailed down in NYC (it's possible to do a launch well, see Comcast) and the DL/UL speeds are an unimpressive 50/5. Both local telephone cooperatives in this area (GVTC toward San Antonio, HCTC where I am) are rolling out fiber with 10 Mbps uploads. TWC will have to do some relatively major plant upgrades to get their service up to that speed, which costs money. Money that they can't get from customers because this increased competition is driving prices downward. Looks like their fat profit pillow is going to suffer here.

Which is fine. They deserve it.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Of course

said by iansltx:

My point exactly. TWC has said that they will be launching DOCSIS 3 in the San Antonio area (which probably means here in Fredericksburg soon after) the first half of this year. One problem: they don't seem to have D3 nailed down in NYC (it's possible to do a launch well, see Comcast) and the DL/UL speeds are an unimpressive 50/5. Both local telephone cooperatives in this area (GVTC toward San Antonio, HCTC where I am) are rolling out fiber with 10 Mbps uploads. TWC will have to do some relatively major plant upgrades to get their service up to that speed, which costs money. Money that they can't get from customers because this increased competition is driving prices downward. Looks like their fat profit pillow is going to suffer here.

Which is fine. They deserve it.
]
One market per half year. " markets a year. They`ll have their entire footprint upgraded to D3 by...2100!
iansltx

join:2007-02-19
Austin, TX
kudos:2

Re: Of course

I'm not saying they're being quick about it, but NYC won't be the only D3 market before long.

Cheese
Premium
join:2003-10-26
Naples, FL
kudos:1

Sigh....

They're in a unique position to focus primarily on pleasing investors, given they don't face substantive competition.

Sigh...this makes me upset, the focus should be on the CUSTOMER, without them, YOU DON'T HAVE A COMPANY

56403739
Less than 5 months left
Premium
join:2006-03-08
Naples, FL
kudos:2

Re: Sigh....

That only applies when the customer has enough balls to walk away and cut the cord. Unfortunately for most customers, they are addicted, brainwashed sheep who will buy whatever their cable company says to buy.

Back away from both the television and the Internet and your are no longer at their mercy. No TV is worth $200 per month.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Sigh....

said by 56403739:

That only applies when the customer has enough balls to walk away and cut the cord. Unfortunately for most customers, they are addicted, brainwashed sheep who will buy whatever their cable company says to buy.
You idiot. That only applies when there`s someone else for customers to turn to. Your understanding of human rationality utterly fails.

NYR 56
Premium
join:2000-12-05
Smithtown, NY
said by Cheese:

CUSTOMER, without them, YOU DON'T HAVE A COMPANY
The same can be said about the investors...

Of course, it generally is in the investors best interests to please the customers.
Sammer

join:2005-12-22
Canonsburg, PA

Short term cash cow

How many times does TWC intend to change its name to improve its lousy reputation with customers. Eventually this cash cow will run dry and investors will drop the stock faster than a NY minute... Of course TWC will probably then ask for a government bailout so its customers don't suffer.