HBO tracking stock could unlock value for Time Warner
Time Warner (TWX) should consider a tracking stock for its HBO television unit as a way to bolster shareholder value, Janney Capital Markets analyst Tony Wible suggested in a report Friday. Media company Time Warner is undervalued on a sum-of-parts analysis, Wible says. Management needs to consider alternatives after rejecting a takeover bid by 21st Century Fox (FOX). “The company needs to show that it can create more value on its own, which is difficult to show inside a year, given the nature of the ad market and long-term affiliate fee deals,” Wible said. “We believe TWX could quickly add value by considering a tracking stock for HBO that forces TWX to be valued on a sum of parts.” He says HBO is worth more than $30 billion, or $35 per Time Warner share. The remaining parts of Time Warner, including the Warner Bros. movie studio and Turner cable channels…