AT&T (NYSE:T) is planning an expansive IPO that could help it break further into new markets, according to a confidentially filed IPO for DirecTV Latin America. The news of the IPO helped AT&T shares rise by almost 2 percent, and could be one of the biggest events on the market during 2018.
Spreading the entertainment
AT&T (NASDAQ: T) understands that its future will in a large part be defined by how successfully the company branches out into new, emerging markets, meaning it should come as little surprise that it’s eyeing rapidly growing Latin American markets with envy. The company kept the announcement regarding its forthcoming IPO brief, and many of the details are still unknown to most market onlookers, but investors are already clamoring with interest.
News initially broke that AT&T was considering foraying more into Latin American markets last fall, although nothing serious had been confirmed until now. The IPO would offer a minority interest in its DirecTV Latin America to consumers by the end of the first half of 2018, though there remains no full confirmation that any such IPO would be completed. After seeing the market’s interest in the rumors surrounding its expansion, however, it stands to reason that executives may begin to eye the idea with greater favor than before.
AT&T’s DirecTV Latin America already has a pretty impressive footprint within Latin American entertainment markets; it already owns a majority of Sky Brasil and owns a hefty minority share of Sky Mexico, for instance. Any IPO for DirecTV Latin America would list the smaller unit as independent of the larger parent company, meaning its financial fate would depend solely on its success within Latin America. Investors can thus rest reassured that DirecTV Latin America wouldn’t be merely riding on the coattails of AT&T’s broader successes or failures elsewhere.
The telecom behemoth has been raising many investor eyebrows lately, and not just with news of Latin America-based IPOs, either; the mammoth $85 billion merger between AT&T and Time Warner, for instance, has drawn serious headlines since it was first announced. The company hopes to remain competitive against the likes of Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN), as well as other new-media pioneers who are reshaping the entertainment industry, and could view its Latin American IPO as a way to stay ahead of the competition in international markets.
AT&T continues to make headlines
Legal struggles surrounding the merger have generated some awkward press for both companies, however, particularly since the Trump Administration explicitly sought to block the merger in what some analysts called an attack on media outlets critical of the president. Investors eager about AT&T’s Latin American IPO, should it ever materialize, will thus likely be keeping in mind the fact that the parent company is not only enduring a harsh legal battle, but is indeed in a feud with the current administration itself.
DirecTV Latin America would be fairing independently within its own market, however, meaning many potential shareholders are likely unconcerned about any ongoing feuds within the United States. Recently, AT&T’s shares have been down by more than 10 percent in the last year, and many investors are likely more concerned about the broader health of the company than they are with any media mayhem surrounding the president and a merger with Time Warner.
While it stands to reason that a successful IPO for DirecTV Latin America could put some more wind in AT&T’s sails, investors shouldn’t count their eggs before they hatch. It’s vitally important to remember that no IPO has yet been confirmed, after all, and to keep in mind that, regardless of future filings, any such offering could disappear at the last minute if AT&T’s executives believe that now isn’t the right time for a public debut.
If the company is truly intent of carrying out its merger with Time Warner, however, it will need some serious cash based on mt4 indicators sometime soon. An IPO for DirecTV Latin America could stand to be an ideal opportunity for the company to get some extra capital on hand to help pay down whatever expansive debts are likely to be generated by such a monstrously large merger, after all, and some execs may find the opportunity too ripe to resist.
While certain Latin American economies like Venezuela continue to plummet, many economies in the region are stabilizing and stand to grow quite a bit, meaning such an IPO could occur at an ideal time. Until more information is released by AT&T, however, investors will have to bide their time and wait for more news surrounding its forthcoming merger to break to get a better idea of where AT&T may be looking for cash in the immediate future. A DirecTV Latin America IPO could be one of the biggest events of 2018, but for the foreseeable future would-be shareholders will simply have to be patient.