Comcast (CMCSA) Stock Surges 20% as Company Plans to Split Into Two

TLDR

• Comcast announced it will spin off NBCUniversal and Sky into a separate publicly traded company.
• CMCSA stock surged roughly 20% in premarket trading on the news.
• The tax-free spinoff to shareholders is expected to be completed within one year.
• Comcast will retain up to a 19.9% stake in the new NBCUniversal entity for up to one year post-split.
• The remaining Comcast business will focus on broadband, wireless, and cable TV under former CFO Michael Angelakis.

Comcast plans to break itself into two separate publicly traded companies, sending its stock up around 20% in premarket trading Monday — a move that, if it holds, would mark the company’s biggest single-day gain since October 2008.

Comcast Corporation, CMCSA

The plan is to spin off NBCUniversal and Sky into a standalone media company, while the core Comcast business retains its broadband, wireless, and cable TV operations.

Comcast said the spinoff will be structured as a tax-free transaction for shareholders. It is expected to close within the next 12 months.

CMCSA was trading around 20% higher premarket, reflecting the market’s positive reaction to a restructuring that has been a long time coming.

Shareholders in Comcast will end up holding stock in both companies once the split is complete. Comcast expects to keep roughly a 19.9% stake in the new NBCUniversal company for up to one year after the separation closes.

The new NBCUniversal will include the Universal film and TV studios, NBC and Telemundo networks, Bravo, Peacock, its growing theme parks division, and Sky — the European media business Comcast acquired back in 2018.

Who Runs What

On the leadership side, Mike Cavanagh, who currently serves as co-CEO of Comcast, will take the helm of the new NBCUniversal entity. Fellow co-CEO Brian Roberts will stay involved with both businesses.

Michael Angelakis, a former Comcast CFO, will return to lead what remains of Comcast — focused on its connectivity and wireless operations.

The remaining Comcast business will include Xfinity broadband, Xfinity Mobile, and its cable TV operations. The company has been working to slow subscriber losses on both broadband and traditional TV.

Earlier this year, Comcast already moved cable news channels including MSNBC, CNBC, USA, and Syfy into a separate entity called Versant.

The Rationale

Company leadership believes the two businesses are now mature enough to operate independently. The idea is that each unit can pursue its own growth path or dealmaking without being weighed down by the other.

The two companies will operate under a dual-class share structure. Comcast did not disclose the expected market capitalization of either entity at the time of the announcement.

The post Comcast (CMCSA) Stock Surges 20% as Company Plans to Split Into Two appeared first on CoinCentral.