Starz (STRZA), the company that was spun out of John Malone’s Liberty Media (LMCA) last year, may be better off as part of a larger media company with other cable channels. According to the New York Post and other published reports, Malone is looking for about $5 billion for Starz, which like HBO and Showtime, is increasingly competing with Netflix (NFLX) and Amazon (AMZN) but lacks the bench strength of other networks. Seems like a nice idea but at a market cap of $3.2 billion Malone may be asking quite a lot from bidders.
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Outerwall (OUTR), parent of Redbox, is also asking for a bit more, announcing a 25% price hike for DVD rentals. Shares seeing a nice 7% pop. It will now cost you $1.50 starting December 2, 2014. Management insists Redbox is still the cheapest deal around for new releases, plus customers get access months before streaming subscription services. By the way, the company is also hiking prices on Blu Ray and video game rentals in the near future. Pricing power is never a bad thing for investors
Verizon (VZ), on the other hand, may have less pricing power due to a crowded wireless world. Shares are down over 1% and the stock is one of the worst performers in the Dow Jones Industrial Average (^DJI) after the team at Citigroup (C) cut the stock to a hold suggesting heavy promotional efforts will curb profits in 2015. The stock hasn't done much this year, yet its worth noting Verizon does have a nice 4.4% dividend yield for those investors who seek out that extra income even when the stock is trailing the S&P 500 (^GSPC).
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