Investment idea generation.


Our thoughts.

Jeff Ubben Bear Case At Fox

Jeff Ubben's ValueAct has a big bet on 21st Century Fox (FOXA). A move that hasn't played out well so far. Fox is Ubben's third largest holding, with shares down 15% since ValueAct went activist. 

I have an idea of what Ubben is up to, but he'll have to work overtime to get it done before Fox and other pay TV players start seeing their industry eaten up by smaller, faster, streaming competitors.

As well, cord cutting is growing faster and faster. eMarketer pegs the pay-TV households falling at an accelerating rate over the next four years, with over a quarter of households not paying for traditional TV by 2020. That number is at 17% today. 

The number of digital and streaming services grew at a faster rate in 2015 than ever before. HBO is the underrated cable killer, “In addition to standalone offerings from the likes of HBO, there are new digital bundles that include many of the channels consumers could only have received with cable and satellite subscriptions in the past. This widespread availability of digital content makes cord-cutting a viable option for a growing segment of the viewing population.”

The pain that Ubben could feel, granted Fox has a decent international presence, will extend over to Mario Gabelli and his GAMCO's thesis for CBS (CBS) and Viacom (VIAB) as well.