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Jim Cramer: AT&T's Balance Sheet Is Now 'Compromised' By 'Expensive' Acquisition Of Time Warner

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Jim Cramer isn't the biggest fan of AT&T Inc. (NYSE: T)'s decision to pursue an acquisition of Time Warner Inc (NYSE: TWX).

For starters, Cramer said that if he were a shareholder of AT&T, it would be to capture the 5 percent dividend yield. However, the price tag on its acquisition now implies that the telecom's balance sheet is "compromised" by the "expensive" acquisition.

"People want AT&T for the dividend. That's why they own the thing," Cramer said. "They don't own it because of growth."

Related Link: AT&T Makes Bid For Time Warner... But If Trump Gets Elected, All Bets Are Off

Cramer said the deal could be in response to the growing threat Time Warner faces by new-age media empires like Facebook Inc (NASDAQ: FB) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s Google unit and Amazon.com, Inc. (NASDAQ: AMZN).

Time Warner is taking a closer look at themselves and realizing they're no longer as relevant as they used to be and combining together would form a strong ecosystem. Meanwhile, AT&T is bleeding market share to rivals T-Mobile US Inc (NASDAQ: TMUS) and Sprint Corp (NYSE: S).

Bottom line, Cramer thinks that old-age media executives are "very East Coast guys who don't really understand the mentality of what Google might be up to."

Posted-In: AT&T Dividend AT&T Time Warner Merger CNBC CNBC Google Jim CramerTech Media

 

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