When a company like Verizon Communications Inc. (NYSE:VZD) says they are willing to talk about a merger, Wall Street listens and reacts. Such was the case Tuesday when Verizon CEO Lowell McAdam said he would be willing to have merger talks with just about anyone.
McAdam told Bloomberg, “If [Comcast CEO] Brian [Roberts] came knocking on the door, I’d have a discussion with him about it.” McAdam added, “But I’d also tell you there isn’t much that I wouldn’t have a discussion around if somebody came and said, ‘here’s a compelling reason why we ought to put the businesses together.'"
Anyone Means Anyone
Potential merger partners specifically mentioned included Comcast Corp. (NASDAQ:CMCSAC), The Walt Disney Co. (NYSE:DISC) and CBS Corp. (NYSE:CBSC). As a result of McAdams’ comments shares of all 3 mentioned companies rose Tuesday, according to Bloomberg.
That said, talk is cheap and as McAdam noted on CNBC later in the day Verizon hasn’t found or identified a specific merger partner and has no plans to announce anything anytime soon. McAdam said the company was installing a lot of fiber in support of its wireless network and no other company was matching what Verizon was doing.
Regarding A Verizon-Comcast Union
Buying a cable network like Comcast might make sense to Verizon since cable dominates the high-speed broadband market. Much of Verizon’s network is based on outdated DSL technology.
Verizon has the most mobile subscribers but Comcast is the largest cable company and home internet service provider. Merging the two would create a company with 32 million internet subscribers and put the new company more than 9 million subscribers above Charter Communications Inc. (NASDAQ:CHTRC), the next biggest home ISP.
Bigger And Better
Verizon has plans to invest more than $1 billion in millions of miles of fiber-optic cable over the next few years. The idea is to create faster 4G in advance of a roll out to 5G, providing even faster broadband to homes. This is important to Verizon because the company’s bread and butter has always been the fact it offers the fastest, most reliable service.
Tuesday Verizon announced a deal with Corning Inc. (NYSE:GLWC), maker of the Gorilla Glass smartphone screen cover. As part of the deal Verizon will buy up to 12.4 million miles of fiber-optic cable every year until 2020. It’s all part of Verizon’s promise to bring faster download speeds to wireless devices.
Verizon Earnings Thursday
It all culminates when Verizon reports earnings early Thursday. Currently Verizon stock is trading at about $49 per share. The combination of merger rumors and any positive earnings could boost the stock. On the other hand, should the numbers be disappointing, share prices could fall. Ahead of Thursday’s earnings report, Verizon was expected to earn $0.98/share on $30.59 billion in revenue.