Time Warner stock surged 4% Tuesday after reports claimed activist investor Carl Icahn was building a stake in the content giant, even as Icahn denied he owned even a single Time Warner share.
Reports first surfaced in the New York Post, citing unnamed sources, that several activist investors were considering making a move on the company, including Corvex Management, a fund run by Icahn protégé Keith Meister. Other reports said Icahn himself was building a position in Time Warner, perhaps in a rerun of his 2006 takeover attempt of the company. Later today Icahn himself told CNBC that he did not own a single Time Warner share and was annoyed “that certain speculators use my name to make profits at the expense of other shareholders.”
Time Warner declined comment.
The media giant has been the focus of intense takeover speculation over the past several weeks. The stock declined about 24% in 2015 along with the rest of the programming sector, as cord-cutting, cord shaving and lower ratings have cut into revenue.
The last time the company’s stock was in a tailspin, it attracted the attention of 21st Century Fox, which launched an unsuccessful $80 billion bid for the company.
While Time Warner was successful in beating back those advances, some reports suggest that some investors believe spinning off its HBO unit would unlock value akin to subscription video on demand giant Netflix. Netflix stock more than doubled in 2015 and is off to a strong start this year, up about 2% since the beginning of the year.
But others have noted that an HBO spinoff won’t necessarily reap the same gains because it isn’t growing as fast as Netflix.
Time Warner shares were up as much as 4.1% ($2.83 each) in earlier trading Tuesday to $72.44 per share. The stock closed at $71.09 each, up 2.1% or $1.48 per share.
