Comcast shares dropped about ~8%, or ~$16bn in market cap value, post its counter-offer for Sky at a rather generous ~$41bn EV.

Given the headwinds in the pay-TV industry, I would definitely view the price as excessive and deserving of a negative market response.

However, the share price decline was overdone and Comcast shares now offer compelling value, with further upside should the deal not go ahead.

If the deal does go ahead, it should be earnings-neutral as well as assist with geographic diversification of the company – which is not a bad outcome, either.

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