• by David Goetzl  @dgoetzl, October 19, 2006

While some major cable companies are going private, Time Warner Cable is going public. TWC, the second-largest cable operator in the country, plans to offer shares of the business in an IPO, according to a Wednesday filing with the SEC.

The shares being offered are derived from TWC's recent acquisition of systems run by bankrupt Adelphia. Despite the IPO, Time Warner will still own the major chunk of the voting shares in the company.

The move could be viewed as a first step by parent Time Warner to unlock perceived hidden value in the MSO--which, like many cable operators, has benefited by offering a "triple-play" bundle of cable, Internet and phone services. Time Warner is also looking to jump-start its languishing stock price, which rose slightly (1.08%) to $19.59 a share on news of the IPO.

Credit Suisse analyst William Drewry wrote in a report that "we believe the market has only started to appreciate the value in Time Warner Cable, and believe the IPO and stand-alone stock with a separate valuation will go a long way toward unlocking value for (Time Warner) shareholders. While (largest MSO) Comcast may have additional upside, we believe Time Warner is a great cable play waiting to happen."

Cable operators such as TWC also hope that revenues will increase via sales of highly targeted ad opportunities, in which marketers can aim messages at ZIP codes or even individual homes, via new technologies that MSOs are deploying.

Potential competition for TWC could come eventually from telcos, such as Verizon and AT&T, which could offer a "quadruple play" of the same three services, plus wireless phone.

As TWC goes public with the ticker symbol "TWC," Cablevision may be on a path toward going private, just as Cox did in 2004.

TWC serves more than 14 million homes, and trails only Comcast in MSO distribution rankings.