Back to top

Analyst Blog

Time Warner Inc. (TWX - Analyst Report) announced that it has concluded the spin-off of its subsidiary Time Inc.  Following the news, shares of the newly formed company Time Inc. (TIME - Snapshot Report), slid 0.8% fueling concerns about the company’s growth prospects as the secular headwinds loom large over the print media industry. However, shares of Time Warner rose 1.2% on the index.

As a part of the deal, Time Warner’s shareholders’ got one share of Time Inc. for every eight shares of Time Warner. The company will pay dividends on the shares of Time Inc. as the spin-off closes officially. The dividend payment will be made on a pro rata basis, previously approved by the parent company’s board.

Notably, when the company declared completion of the Time Inc. spin off, rumors of its plan to acquire a stake in Vice Media Inc. started surfacing.

The company first announced its plan to spin-off Time Inc. in Mar 2013 after the deal with Meredith Corp. (MDP - Analyst Report) to create a magazine-based company failed to materialize. Time Warner, for long, was contemplating on selling off its magazine unit as it was not yielding profits. The inclination of consumers toward digital media has had a profound impact on the print media.

Management believes that offloading Time Inc. would allow it to concentrate purely on television networks and film and TV production businesses.

Time Inc. is the latest in the series of divestments by the parent company. Earlier, Time Warner Cable (TWC - Analyst Report) and AOL Inc. (AOL - Snapshot Report) were spun off from Time Warner into independent companies.

Time Inc., which includes brands such as People, Sports Illustrated, InStyle, Time, Real Simple and Fortune, faces a serious challenge as the company takes off on its own. However, CEO Joseph A. Ripp is confident about a turnaround and has maintained that it might take time but it is not impossible.  

Time Warner carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%