Comcast NASDAQ:CMCSA surged as much as 25% after announcing plans to spin off its media businesses, a move LightShed Partners analyst Rich Greenfield said was long overdue.
Greenfield told CNBC that NBCUniversal's assets had been trapped inside Comcast and valued at only 4 to 5 times EBITDA. He said the breakup effectively admits there is no real synergy left between Comcast's cable business and NBCUniversal's media and theme park assets.
The move marks a sharp reversal from Comcast's previous stance. Just 6 months ago, NBCUniversal leadership argued the media business would not get stronger as a smaller standalone company. Greenfield said the shift may reflect frustration with Comcast's stock, which had gone nowhere for 14 years, or a desire to pursue other deals.
The spinoff could also make NBCUniversal more flexible for future combinations with companies such as Sony, Netflix NASDAQ:NFLX, Amazon NASDAQ:AMZN, Roblox or Paramount. Meanwhile, Comcast's core cable business still faces pressure from fiber builds, telcos and SpaceX.