ONLINE FOREX BROKER
2020-05-27 • Updated
You’ve probably missed this news while being too busy following Netflix. Here it is: this week, on May 27, the longtime cable TV provider AT&T will launch HBO Max – a new streaming platform. This is indeed a big announcement for a company, which is about to enter a crowded streaming market conquered by Disney, Amazon Prime, and, of course, Netflix. What will it mean for the AT&T stock?
The American company has come through tough times recently. The first reason for that is the declining number of cable and satellite subscriptions. According to surveys, more than 60% of Americans have cut or are planning to cut the cable TV subscription. Streaming platforms turn out to be cheaper than regular TV. The coronavirus outbreak worsened the situation even more with an absence of live sports – the only reason most Americans still own a cable subscription. Being the largest company in the telecommunication industry, AT&T suffered from a subscription loss. In the earnings first quarter, the company revealed that the number of subscribers to its services declined by 897 thousand.
The new HBO Max platform is aimed to solve this problem for AT&T. Due to the large chain of partners and many strategic acquisitions AT&T has, the service will provide access to several pay-tv providers including TNT, TBS, TruTV, HBO, and others. Let's not forget the $108.7 billion merger AT&T made with WarnerMedia. To keep its clients interested, AT&T plans spending $4 billion in HBO Max over the next several years to create new content.
The upcoming release comes in line with CEO Randall Stephenson's plan for increasing the stock price of AT&T. The company plans to focus on HBO Max as well as on the new top DirecTV replacement.
The main question is whether the new platform by AT&T will be more attractive to customers than the services by its main competitors (Netflix and Disney)? Analysts doubt about that. Firstly, HBO Max will be more expensive than the cheapest offers by other platforms. While HBO Max costs $15, Disney+ is provided for $7 a month, and Netflix’s cheapest tariff is $9 per month. At the same time, the agreements between AT&T and its partners make it impossible to lower its pricing. Thus, some experts see HBO Max have a low impact on the company’s revenue for several years.
Nevertheless, the new platform is expected to stop the “bleeding” of the stock, which has fallen from the highs above $39.5 since the beginning of the year and has been trading below $30 for a while.
Despite the uncertain future, the initial reaction of the market to the announcement of a new platform has been positive. On Tuesday, the price of the AT&T jumped above the 50-day SMA to the resistance at $31.2. The next resistance for the stock will be placed at $31.9. Bears will be looking for an opportunity at the $30 level, where they will be expecting a slide lower to $28.9.
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The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
More and more analysts are sure Brent oil will surpass $100 a barrel. So how heavily will oil move the markets, and what will the direction of the movement be? Let's find out!
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
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