Jefferies Downgrades AOL After FTC's Clearance Of Verizon Purchase

In a report published Wednesday, Jeffferies analyst Brian Pitz downgraded the rating on

from Buy to Hold, while reducing the price target from $67 to $50. FTC has cleared the purchase of AOL by

for $50 per share. "Tim Armstrong, CEO of AOL, and the senior management team are expected to stay on to run AOL," analyst Brian Pitz mentioned. In the report Jefferies noted, "Verizon expects to fund the deal with cash on hand and commercial paper. The stock is currently at $50.00 (6/9/15, closing price), which means the market is pricing a very high likelihood of the transaction being completed." The merger is expected to bring a large amount of Verizon's internet traffic to AOL's branded content. Verizon can monetize the same through AOL's programmatic assets. "We believe AOL has some of the best programmatic assets online and eventually the goal is to perhaps monetize more traditional OTT long-form video in this way too. Verizon touches 70% of the Internet traffic across 1.5B PCs, TV, and mobile devices," Pitz added.