Cable stocks were hammered once again Thursday, with Comcast Corp. losing
$1.57 per share, or 6 percent, amid rumors of a possible downgrade by
credit-ratings agency Moody's Investors Service Inc.
Comcast stock fell as low as $23.45 each Thursday before rallying to close at
$24.55, down $1.57.
The other big loser for the day was Cablevision Systems Corp., which fell
$1.20 per share, or nearly 8 percent, to close at $13.90.
Comcast stock was pounded as rumors began circulating that Moody's was
preparing to reduce the MSO's credit rating below investment grade. Losing that
rating could put its pending merger with AT&T Broadband in jeopardy.
AT&T Corp. stock hit a 52-week low of $9.31 per share Thursday before
climbing to close at $9.45, down 55 cents each.
Comcast currently has a 'Baa3' rating from Moody's -- one notch above
A Comcast spokesman declined to comment.
Rumors swirled around trading floors Thursday that a downgrade was imminent
due to the additional debt the company would take on in the AT&T Broadband
merger. While Moody's has had Comcast on credit watch for possible downgrade
since July 9, 2001, the ratings service has yet to take any action.
Moody's analyst Neil Begley, who follows Comcast, could not be reached for
Cablevision stock has been under pressure for months as it struggles to
bridge a $500 million funding gap for 2003. The company has said it is
investigating its options, including selling assets or reducing capital
expenditures, but the lack of a clear answer has helped to drag down the
According to some analysts, the decline in the stocks was due to a
combination of the downgrade rumors, some profit-taking as the end of the
quarter nears and the general skittishness toward cable due to the unfolding
Adelphia Communications Corp. scandal.
Stocks of the other publicly traded MSOs also fell, with Cox Communications
Inc. down 96 cents to $30.04, Insight Communications Co. Inc. down 50 cents to
$13.94, Mediacom Communications Corp. down 29 cents to $9.36 and AOL Time Warner
Inc. down 63 cents to $16.
Adelphia closed at 17 cents each, unchanged.