Jeff Bewkes, the Stanford MBA behind HBO's huge success, took over as CEO of BloggingStocks' parent, Time Warner (NYSE: TWX) this January. The New York Times reports that he wants to get rid of everything he inherited except selected "content providers" -- e.g., people who make movies and TV programs and write articles in magazines. But would such a strategy make Time Warner's stock an attractive investment?

I don't think so. The reason is simple. Warner Brothers produced an enormous hit with Dark Knight -- the LA Times reports that its revenues so far total $441 million domestically and are expected to hit $520 million. Dark Knight's success is not typical -- it's an outlier. That's because the movie business is a huge gamble as is any enterprise that depends on the fickle combination of talent and audience tastes. Hollywood often overcomes this problem by getting wealthy individuals to pony up to finance films on the hope that they might get to rub elbows with the stars.

Meanwhile, Bewkes wants to dump the cable business. He plans to spin off 84% of Time Warner Cable to shareholders. He plans to sell AOL. And it looks like he'll try to dispense with most of Time Warner's magazines. This would leave Time Warner a much smaller company with lower return on assets -- by my rough estimate based on doubling the revenues and operating income of its first half results for the remaining Filmed Entertainment and Networks segments.

Continue reading Does Jeff Bewkes have a credible vision for making Time Warner (TWX) a good investment?

Does Jeff Bewkes have a credible vision for making Time Warner (TWX) a good investment? originally appeared on BloggingStocks on Mon, 11 Aug 2008 12:30:00 EST. Please see our terms for use of feeds.

Depending on who is doing the measuring, The Weather Channel is one of the most widely watched 24-hour cable networks. Weather.com is among the top 15 or 20 most visited websites in the U.S. Since there are very few media properties of this size on the block, they are especially valuable.

Landmark, the owner of The Weather Channel, has put it on the block. It wanted $5 billion. The rumors are that it will get $3.5 billion on a good day. The last two companies kicking the tires were Time Warner (NYSE: TWX) and NBC Universal. TWX has apparently dropped out.

Although the media conglomerate has over $9 billion in money coming in as it finishes its spin-off of Time Warner Cable (NYSE: TWC), management cannot afford to be viewed as overanxious. Paying too much for a large asset would not make the new era of shareholder value under recently appointed CEO Jeff Bewkes look like it is off to a terribly good start.

According to The Wall Street Journal (subscription required), "Time Warner withdrew after Landmark told the media company it needed more time to make a decision." That probably means the seller is holding out for more cash.

For Time Warner, it is a shame. Its cable networks, CNN and Turner, do particularly well. Putting The Weather Channel with them would have built that business. Online, TWX has big properties like AOL and CNN.com, making Weather.com a good marriage.

It all made sense, except the price.

Douglas A. McIntyre is an editor at 247wallst.com.

Time Warner walks on The Weather Channel originally appeared on BloggingStocks on Sat, 14 Jun 2008 15:40:00 EST. Please see our terms for use of feeds.

Next Wednesday, April 30, in the early pre-market hours, we'll get to see earnings out of Time Warner Inc. (NYSE: TWX). Estimates for the media conglomerate from First Call are 23 cents EPS on $11.39 billion in revenues, although these numbers may be higher or lower after four more trading sessions have passed. Next quarter estimates are 25 cents EPS on $11.37 billion in revenues. Estimates for fiscal December 2008 are $1.09 EPS on $47.74 billion in revenues. Over the last 90 days, the estimates have come in slightly.

While shares have gotten back over $15, Time Warner's 52-week trading range is $13.65 to $21.97. What is interesting is that there have not been all that many major analyst calls out there. Analysts also still have an average price target north of $21.

It's too soon to provide any options or chart analysis, but the volume has been extremely light in stock options. That might indicate that traders are not expecting any major announcement for a turnaround.

One thing we may learn about are the old rumors that AOL is looking to get between Microsoft Corporation (NASDAQ: MSFT) and Yahoo! (NASDAQ: YHOO) over that proposed merger. Whether or not this occurs or whether or not this is even addressed ... well, that is up to Mr. Bewkes.

Note: Time Warner is the parent company of BloggingStocks. Jon Ogg is a producer and editor of the Special Situation newsletter for 247WallSt.com.

Prepping for Time Warner earnings Q1 2008 originally appeared on BloggingStocks on Thu, 24 Apr 2008 15:35:00 EST. Please see our terms for use of feeds.

Getting your new triple-play or ISP package -- at Wal Mart originally appeared on BloggingStocks on Fri, 11 Apr 2008 14:45:00 EST. Please see our terms for use of feeds.

AOL could torpedo Microsoft-Yahoo! deal (YHOO, TWX, MSFT, GOOG) originally appeared on BloggingStocks on Wed, 09 Apr 2008 21:06:00 EST. Please see our terms for use of feeds.

I am pondering why I am still hanging on. My cost basis was $12.10 and we sold half our shares in the low $20's amid the flurry of news about Carl Icahn, share buy backs and breaking up the company. I sold some stock and he sold some stock, I kept some shares and he kept some shares. Mine are of little consequence except to me. His are of the utmost importance to everyone.

As long as Carl still has some hope, should we? TWX is trading around $14 these days. This is a story of a company going nowhere fast. It has been improving AOL over the past few years and the site is very good in my estimation. But that does not seem to be producing much growth.

As AOL improves, so do the competitors and to a large part the status quo continues. From my perspective, the Web business is just a spending game where the stakes keep increasing but the rewards are not always tangible. (Disclosure: AOL is the mothership for BloggingStocks.com which by many metrics has been very successful, but our success has limited impact on AOL's overall revenue).

Continue reading Chasing Value: Time Warner (TWX) going nowhere fast

Chasing Value: Time Warner (TWX) going nowhere fast originally appeared on BloggingStocks on Fri, 21 Mar 2008 08:43:00 EST. Please see our terms for use of feeds.

A recent SEC filing laid out the "upside" part of executive compensation for Jeff Bewkes, president and CEO of Time Warner Inc. (NYSE: TWX). He has received options that gives him the right to acquire 1.5 million shares of common stock. Bewkes' new options have a $14.92 exercise price and will vest over the next four years.

Bewkes already received options to purchase 950,000 shares in December in connection with his new employment agreement. Former CEO Richard Parsons still remains chairman and he has received 106,500 restricted stock shares and an option to acquire 319,400 shares.

If Bewkes and the team perform and this stock goes back up to $20, Bewkes would net an extra $7.62 million in gains before taxes.

This does not look egregious at all when you consider the situation. Bewkes stepped in right when the economy started a serious slump and negative stock performance had already started well before that. It may take some time for Time Warner's stock to get back up to $20 because of the economy and the bite of the bear market. Shareholders should be glad to see that he has some serious incentive to perform.

Time Warner shares gained 37 cents, or about 3%, today to close at $14.84. The 52-week trading range before this was $14.64 to $21.97. This stock ended 2007 at $16.45 and shares were above $18 last November.

Bewkes has serious incentive to spur Time Warner stock originally appeared on BloggingStocks on Tue, 11 Mar 2008 18:20:00 EST. Please see our terms for use of feeds.

Bewkes is known for being decisive and making changes based on the numbers, so don't be surprised if there are more changes than these down the road.

In fact, Bewkes noted that Time Warner will be cutting $50 million in corporate spending, with a target of 15% cost reductions on the corporate side of the business.

Continue reading Big changes coming at Time Warner

Big changes coming at Time Warner originally appeared on BloggingStocks on Wed, 06 Feb 2008 12:31:00 EST. Please see our terms for use of feeds.

Time Warner Inc.

Time Warner meets quarterly earnings and sets 2008 targets originally appeared on BloggingStocks on Wed, 06 Feb 2008 06:52:00 EST. Please see our terms for use of feeds.

Time Warner making corporate job cuts? originally appeared on BloggingStocks on Tue, 05 Feb 2008 18:07:00 EST. Please see our terms for use of feeds.

Jeff Bewkes' first day as Time Warner CEO negated by market originally appeared on BloggingStocks on Thu, 03 Jan 2008 15:10:00 EST. Please see our terms for use of feeds.

With investors everywhere trying to read the tea leaves and see what the future holds for Time Warner (NYSE: TWX), the seemingly innocuous comments made by Jeffrey Bewkes and Richard Parsons may provide the best clue as to how things will change when Bewkes takes over:

Parsons, who will stay as board chairman, said in a statement that Bewkes "will have my full support, and I am confident that Jeff will deliver a new era of growth for all of our company's important stakeholders."

Bewkes added: "We have a lot to do, and I'm intensely focused on building shareholder value."

(emphasis added)

Continue reading Mere semantics or a shift in management style for Time Warner?

Mere semantics or a shift in management style for Time Warner? originally appeared on BloggingStocks on Thu, 08 Nov 2007 16:15:00 EST. Please see our terms for use of feeds.

Time Warner (NYSE: TWX) announced that CEO Dick Parsons will step down at the end of the year. Current president and chief operating officer (and former head of HBO) Jeff Bewkes will replace him.

Bill Martin, editor of FindProfit observes, "The move comes as little surprise as Parsons' contract was running out in May 2008, and Bewkes had been groomed to be his successor." Parsons, he notes, will remain chairman.

The advisor explains, "The bottom line is that by all accounts, Bewkes is a solid executive, and one who may be apt to break up the media conglomerate. TWX has taken some limited actions under Parsons to unlock value by listing Time Warner Cable (NYSE:TWC) shares and selling several magazines.

"Bewkes, however, is likely to take the restructuring a step further, including possibly spinning off AOL and TWC completely and selling the entire publishing division. As witnessed by today's reaction to the announced split-up of IAC/InteractiveCorp. (NASDAQ:IACI), such actions would most likely be cheered by investors.

He concludes, "While we had previously viewed TWX shares as a source of funds, we now don't believe it is time to sell. The stock, trading near a 52-week low, looks cheap, and a new CEO with a penchant for restructuring and unlocking value could be just the catalyst that TWX needs."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment commentary and favorite stocks of the nation's leading financial newsletter advisors.

Time for Time Warner? 'Unlocking value' originally appeared on BloggingStocks on Tue, 06 Nov 2007 16:06:00 EST. Please see our terms for use of feeds.

John K. Martin, Jr., who has served as Time Warner Cable's CFO since August 2005, will leave Time Warner Cable Inc. (NYSE:TWC) to become the CFO of Time Warner Inc. at the beginning of the new year.

Robert D. Marcus will become TWC's new Chief Financial Officer effective January 1, 2008. Marcus will retain the title of Senior Executive Vice President and continue to direct Time Warner Cable's mergers and acquisitions, programming, human resources and business affairs departments and will add responsibility for all of the Company's financial functions, including accounting, financial planning and analysis, tax, treasury and investor relations.

Marcus joined Time Warner Cable as Senior Executive Vice President in August 2005. Prior to this he served as Senior Vice President, Mergers and Acquisitions for Time Warner Inc., (NYSE:TWX) and he served in various executive capacities with the parent company since 1998. Marcus was dubbed by the company as the architect and lead negotiator of numerous transactions for Time Warner Inc. and its subsidiaries, including Time Warner Cable's acquisition of Adelphia Communications Corp. and related transactions with Comcast Corporation (NASDAQ: CMCSA), which took place last year.

It sounds like Jeff Bewkes has already been lining up his key personnel to lead the transition period ahead. As a reminder, both companies report earnings Wednesday morning before the market opens.

More executive changes at Time Warner (TWX, TWC) originally appeared on BloggingStocks on Tue, 06 Nov 2007 15:40:00 EST. Please see our terms for use of feeds.

Time Warner, down 18% this year, trades, at a multiple of 18. Disney, whose shares are little changed, is trading a forward price-to-earnings ratio of 17. News Corp., also little changed, is the most richly valued of the bunch with a forward p/e of 20. All three of them report earnings this week. To put it diplomatically, expectations are low. Disney is probably the most compelling value there because of strong brands and top-flight management.

Revenue at Time Warner is expected to be $1.41 billion, up 14.8% according to analysts surveyed by Thomson Financial. Earnings are expected to be 11 cents compared with 19 cents a year earlier. The stock rose today after the company announced that Jeff Bewkes would replace Richard Parsons as CEO starting next year. Don't expect any big changes at AOL, though. The strategy to turn around the Internet unit was developed by Bewkes. The company will come under pressure to divest AOL and other businesses including publishing. Earnings are due Wednesday.

Disney reports Thursday. Analysts aren't expecting much out of the Mouse House. Revenue is expected to inch up 2.2% to $8.98 billion. Earnings are expected at 41 cents versus 36 cents a year earlier. With the record-low dollar, the company's Theme Parks are dirt-cheap for foreign tourists. Earnings also should be helped by the "High School Musical" franchise and a solid performance by the ABC Television network.

There will be plenty of talk about the acquisition of Dow Jones & Co. (NYSE: DJ) on Thursday's News Corp. earnings conference call. There will also be discussion about the surging popularity of Facebook. Though so far the Fox Business Network has underwhelmed critics, Murdoch will no doubt put a positive spin on the channel's debut. Revenue for the quarter is expected to increase 9.6% to $6.48 billion. Earnings are pegged at 23 cents versus 19 cents a year earlier.

Time to buy media stocks? originally appeared on BloggingStocks on Mon, 05 Nov 2007 18:29:00 EST. Please see our terms for use of feeds.

Richard Parsons is giving up his position as chief executive officer at Time Warner (NYSE: TWX) to be replaced on Jan. 1 by Jeff Bewkes, the current president. Parsons is stepping down, not because the job is done but because his job is done. He is no longer the person for the job and that has become apparent to everyone, including him. There is no angst, there is no acrimony -- he has done some things very well during difficult times, but it's time to move on.

There are those who would have you believe that this move should have come earlier, myself included. But Parsons and the board were not working on my timetable. Parsons will retain his position as chairman of the company. Depending on how quickly his replacement, TWX president Jeff Bewkes implements his ideas for change, Parsons may be leaving a company that does not much resemble the one he has been leading the last few years.

AOL has already changed a lot. We have witnessed AOL being removed from the company name after billions of dollars of write-downs. AOL was converted to an advertising model instead of being subscription-based. It established partnerships with many other companies including Google Inc. (NASDAQ: GOOG), which acquired a 5% stake for $1 billion and is now the primary search engine.

Time Warner Cable concluded its acquisition of Adelphia Cable and reorganized to form the independent Time Warner Cable (NYSE: TWC) and is struggling somewhat as the cable market changes with the telcos and satellite media providers joining in the competition for home users by bundling services.

Time Inc. has sold off some magazine titles, closed down others and is still trying to define where its future fortunes will be found.

Continue reading Parsons steps down at Time Warner (TWX) - his job is done

Parsons steps down at Time Warner (TWX) - his job is done originally appeared on BloggingStocks on Mon, 05 Nov 2007 16:30:00 EST. Please see our terms for use of feeds.

Earlier today, CNBC's David Faber announced that he has word that Dick Parsons would be stepping down as Time Warner Inc.'s (NYSE:TWX) CEO effective December 31, 2007. Jeff Bewkes is the likely heir apparent, according to Faber, although it seems Parsons may remain as Chairman.

This change at the top may portend unit sales, roll-ups, spin-offs, and even may lead a change in the ownership of Time Warner Cable Inc. (NYSE:TWC).

Management change is becoming almost the norm today. Citigroup's (NYSE:C) Chuck Prince is out, finally, although having Bob Rubin involved for anything more than an interim basis will be a mistake.

Larry Fink has been named as a potential replacement-head for Merrill Lynch (NYSE:MER) and some even have noted that he could be offered top billing at Citigroup (NYSE:C).

You could almost view the break-up announcement of IAC/Interactive (NASDAQ:IACI) as a CEO exit because the five individual units already have the heads named and, at least as of now, Barry Diller is going to stay with the IAC/Interactive parent. He said he'd maintain some role in one or two of the spin-offs but not all of them.

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Time Warner's Dick Parsons expected to join today's CEO exodus originally appeared on BloggingStocks on Mon, 05 Nov 2007 12:44:00 EST. Please see our terms for use of feeds.

At a talk on September 20th at New York's 92nd Street Y, Lazard Ltd. (NYSE: LAZ) CEO Bruce Wasserstein took a swipe at Time Warner Inc. (NYSE: TWX), BloggingStocks' parent, for its moribund stock price. At the same time, Wasserstein patted himself on the back for taking all his chips off the table when the stock levitated above $18 following the publication of a Lazard report on Time Warner.

Lazard, which was hired by corporate raider Carl Icahn in February 2006, authored a 343 page report that argued for a breakup of Time Warner and a big stock buyback. Beyond its $5 million fee, Lazard's reward from Icahn was a bonus based on how far above $18 Time Warner stock went. Lazard's report estimated that Time Warner's breakup value ranged between $23.30 and $26.57. Following the report, Time Warner stock rose -- peaking at $22.73 on January 12, 2007 -- before declining to its current $18.99 -- about 50 cents a share above its price in February 2006.

While he claimed to like Time Warner management -- he called CEO Dick Parsons "a lovely, well-liked guy" and president Jeff Bewkes, "a highly regarded management kind of guy" -- Wasserstein blamed Time Warner's moribund stock price on their decision not to follow the recommendations in his report. Wasserstein thought Time Warner took one of his ideas -- a $20 billion stock buyback (Time Warner bought back $12 billion) -- but ignored his other suggestions -- to do more spin-offs and to run AOL more effectively.

Continue reading 92nd Street Y Talk: Lazard's (LAZ) Wasserstein cashes in, disses Time Warner (TWX)

92nd Street Y Talk: Lazard's (LAZ) Wasserstein cashes in, disses Time Warner (TWX) originally appeared on BloggingStocks on Fri, 05 Oct 2007 11:35:00 EST. Please see our terms for use of feeds.

There has been more than speculation that Yahoo (NASDAQ: YHOO) is near the center of Microsoft's (NASDAQ: MSFT) radar screen, but perhaps AOL-Yahoo would be better fit. Maybe a deal for AOL will be more likely once Jeff Bewkes replaces Richard Parsons as chief executive of Time Warner (NYSE: TWX). (The Wall Street Journal reported today that Bewkes is likely to take over from CEO Dick Parsons as early as Jan. 1, 2008).

One reason Microsoft does not own Yahoo already is that Yahoo is expensive. Maybe Yahoo has another path to follow. Maybe Yahoo and Time Warner could help each other out. If Time Warner set AOL free to merge with Yahoo than their combined forces might be a better competitor for both Google (NASDAQ: GOOG)and Microsoft.

The current five year deal between AOL and Google made Google the seach engine for the site and since it forked over $1 billlion for 5% of the business, the valuation if it were independant would be $20 billlion. More importantly at the time it was reported that 10% of Googles revenue was generated through AOL. That certainly was incentive to get a deal done. I have seen no current data on this but if it is somewhere in the vicinty then a Yahoo/AOL combination would reduce Googles stranglehold on search and add it to the new company. It might represent as much as a 20% swing in traffic and revenue.

If Yahoo were to be acquired by Microsoft, it would become a part of what is now a very large conglomerate. One that should give some thought to it's own lethargy. Microsoft is losing money on numerous hardware ventures and might be better off refocusing on software, both online and in the business environment. Now that Parsons is stepping aside to let Bewkes lead pehaps there will be the energy and insight to make a move.

Continue reading Future Time Warner (TWX) CEO Jeff Bewkes should consider an AOL-Yahoo deal

Future Time Warner (TWX) CEO Jeff Bewkes should consider an AOL-Yahoo deal originally appeared on BloggingStocks on Mon, 17 Sep 2007 18:00:00 EST. Please see our terms for use of feeds.

On May 31st, BloggingStocks' parent company, Time Warner Inc.'s (NYSE: TWX) president Jeff Bewkes publicly mused about taking AOL public, according to paidContent.org.

Bewkes noted that AOL was at a competitive disadvantage due its lack of an "internet public currency." While that currency enabled AOL to offer $166 billion in stock to buy Time Warner back in January 2000, what would it be worth today?

$24 billion. That's one guess made by multiplying my estimate of AOL's 2007 revenues of $6 billion -- calculated by quadrupling AOL's Q1 2007 revenues of $1.5 billion -- by a price/sales ratio of 4. The latter is based on a review of the price/sales ratios of comparable pure-play internet content firms such as:

• Yahoo! Inc. (NASDAQ: YHOO): 5.9
• CNET Networks, Inc. (NASDAQ: CNET): 3.5
• Baidu.com Inc. (NASDAQ: BIDU): 37.1

I think such a public offering could unlock value because at $24 billion, AOL would be worth 30% of TWX's current $80 billion market capitalization, even though it represents only 12.5% of TWX revenues and a mere 4% of its assets. Moreover, AOL stock could motivate staff and fuel acquisitions.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Time Warner stock.

What is AOL worth? originally appeared on BloggingStocks on Mon, 04 Jun 2007 19:00:00 EST. Please see our terms for use of feeds.