Cablevision stock slides on Rutledge resignation

Shares in Cablevision (NYSE: CVC) dropped nearly 14 percent Friday morning, as investors reacted to news released late Thursday that chief operating officer Tom Rutledge would resign later this month.

Rutledge

Rutledge, a former Time Warner Cable (NYSE: TWC) executive who joined Cablevision in 2004, helped Cablevision CEO Jim Dolan run one of the most advanced cable operations in the country. Cablevision's success at selling a triple-play of digital video, high-speed Internet and telephone service to subscribers in the New York metropolitan area saw it generate $153.97 in average revenue per subscriber during the third quarter, which is higher than any other cable MSO.

News of the abrupt resignation of Rutledge has hit Cablevision's stock. Its shares had dropped to $12.01 by 10 a.m. ET Friday, down $1.92, or 13.78 percent. The exit of Rutledge has also prompted speculation that Cablevision could be an acquisition target. Time Warner Cable, which operates a system in New York City that counts more than 1.2 million subscribers, could use Cablevision's systems in New York, New Jersey and Connecticut to expand its cluster in the area. But executives at Time Warner Cable, which agreed to acquire Insight Communications earlier this year, have said that they do not see other major deals on the horizon.

While downgrading his rating on Cablevision to neutral from a buy rating, Miller Tabak analyst David Joyce noted that he expected it would be a short-term upgrade. He also speculated that Rutledge could be leaving the company to join Charter Communications (Nasdaq: CHTR). "We doubt CVC stock will fall materially, and stay there," Joyce said.

For more:
- See Cablevision news release

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