AT&T’s market cap is 180 billion.
Revenue of 172 billion in 2020.
They lost 5.4 billion in 2020 due to COVID, but made 13.9 billion in profit in 2019.
The majority of what AT&T makes is off cell services, but 25% is from entertainment, mainly Warner Media/Warner Bros.
To compare with two other entertainment companies.
Disney
Market Cap-252 billion
Revenue 2021-67 billion
Profit-2 billion “would be way higher without COVID”
Netflix
Market Cap-170 billion
Revenue-Projected for 28 billion
Profit-Projected around 5 billion
Both of those companies saw streaming as a huge piece of revenue, with it being over 90% for Netflix and Disney+, which is still new at 5.8 billion.
Warner Bros owns HBO Max, which has over 70 million users and will likely becoming competitive with Disney+/Netflix, expecting over 150 million by 2024.
For AT&T stockholders, the best move could be splitting Warner from AT&T, getting 100% of that stock and watching it get valued similar to Netflix/Disney, which would likely be at a valuation giving it a huge return, versus current values.
Right now, AT&T doesn’t seem to be exciting investors, but Warner as it’s own brand, with a growing product could.
Example being PayPal, which split from eBay in 2015 to become its own company.
eBay is worth 36 billion today.
PayPal is worth 192 billion.
There were a lot of reasons for the split, but one was just marketing the stock.
PayPal was in the shadow of eBay and once separated, it did much better.
The two companies if still together would likely be worth less than PayPal is today as just PayPal.
Warner could be similar where it could end up worth 100 billion dollars and it leaving AT&T wouldn’t likely hurt the companies current value.