Donald Trump famously hates so-called “fake news” media (don't even get me started on CNN). But he could be a great addition to Media Stock. This is because Lina Khan, the chairwoman of the US Federal Trade Commission, is likely to resign soon after or shortly after President Trump takes office.
Whoever replaces her will be far better positioned for a major merger, and nowhere is there more pent-up demand for consolidation than in major media.
The consumer protection agency known as the FTC has the power to bring antitrust lawsuits against companies that are jacking up prices for Americans. Khan took that mission to a new and dangerous level.
When President Biden appointed her in 2021, she said people would start paying more for things they order online and small businesses would disappear and be replaced by things people order online. He was best known as the author of the academic paper “The Amazon Antitrust Paradox,'' which predicted gloom and doom. Jeff Bezos' website. That is, unless online retailers collapse into million-item units.
As FTC chair, she didn't break up Amazon, destroy family businesses, or raise prices to astronomical levels, but she believes big companies are inherently bad, so they trade Billions of dollars were wasted in its enactment.
What she failed to understand is that small businesses that can't compete are bad companies and usually end up going out of business or wiping out billions of dollars in shareholder value.
This is what happened with major media when the market demanded consolidation due to changes in the way Americans watch news on their phones rather than television.
Mainstream media became much smaller under Khan's watch. Look at the WBD stock price chart. Paramount is being sold off to a boutique studio.
With a new, more free-market-oriented FTC commissioner in place, you could argue that WBD stock is fairly cheap as Zas cuts debt and weighs down CNN. Like almost every other media company, it's ripe for sale.
