Comcast’s Steady Expansion Reaps High Returns

Comcast has been making steady moves to expand beyond its cable business. The release of their quarterly report for the 3rd quarter of 2017 seem to show that their work has paid off. The media firm, that is now worth $170 billion, has been entering new sectors through the acquisitions of NBC Universal and a recently launched wireless phone service. Comcast shares have risen significantly, and have left the shares of Verizon Wireless and AT&T behind, but more importantly it has pulled away from Walt Disney in market vales this year.

 

In 2009, Comcast made its first big move by acquiring NBC Universal from General Electric in a 2-part, $39 Billion deal. At the time, G.E. was struggling due to the financial crisis of 2008, and sold off NBC Universal at a discount. Bob Wright, the former chief executive for NBC Universal, said that the deal was largely in favor of Comcast and that the entertainment production company could have easily sold for $45 Billion. AT&T has tried to follow with the proposed acquisition of Time Warner for $85 billion, but the deal is still waiting regulatory approval. Comcast has also entered the mobile service industry by introducing a service that uses Verizon’s infrastructure, and avoided having to buy a carrier like Sprint or T-Mobile. Comcast is already reaping the benefits of its smart decisions. The total return that Comcast has seen since the NBC Universal deal was finalized in 2013 is 96%, beating the S&P 500 index and Disney which average at around 80% returns. And has greatly outperformed both AT&T and Verizon who manage about 15% and 26% returns, respectively. Comcast has been carefully expanding and planning for years in the future, companies should take this as an example and strive to achieve not just short-term goals, but also long-term goals.


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