Hollywood’s Big Media Stocks Took a Beating YTD
$LGF, $TWTR, $NFLX, $IMAX
More than 50% of the 50 stocks tracked fell short of the S&P 500 in the year’s 1-H.
Hollywood’s big media stocks took a beating during the 1-H of the year, but the declines could have been much worse if some major companies weren’t propped up by speculation about deal making.
More than 50% of the 50 stocks tracked fell short of the S&P 500 in 1-H of this year. That index managed a 2.7% gain, despite a wicked, short-lived downturn after the UK voted to exit the EU.
But what kept some big names alive was M&A talk, and Thursday’s big Lionsgate/Starz deal is the perfect example.
Leading the charge downward was Lionsgate (NYSE:LGF), whose shares -38% YTDr. But, acquisition target Starz fell 11%, and that could have been much steeper given it gained 6% after the merger was announced.
Other big losers thus far include Twitter (NYSE:TWTR), down 27%, Netflix (NASDAQ:NFLX), off 20%, AMC Networks, down 19%, Imax (NYSE:IMAX), off 17%, Dish Network (NASDAQ:DISH), down 9%, and Apple (NASDAQ:AAPL), also down 9%.
Part of the reason for that are the challenges faced by the TV industry, with competition from digital services, fragmentation, cord-cutting and cord-shaving, the rising costs of sports and other programming, etc.
Disney (NYSE:DIS), which sent the entire entertainment into a funk 10 months ago with its declaration that ESPN was losing subscribers, closed the half-year down 7% and was the worst performer among the 7 big conglomerates.
The best of the Big Seven was Sony (NYSE:SNE), + 19%. Comcast (NASDAQ:CMCSA) was next, + 17%, in part because analysts are Bullish about its pending acquisition of DreamWorks Animation (NASDAQ:DWA). CBS (NYSE:CBS) was next at 16%, and Time Warner (NYSE:TWX) was after that, + 15%, benefiting from constant rumors it is an acquisition target.
Viacom (NASDAQ:VIA) posted a 2% gainer during 1-H of the year, despite a legal fight for control that pits chairman emeritus Sumner Redstone and his daughter Shari against CEO Philippe Dauman and other board members.
21st Century Fox (NASDAQ:FOX) is flat on the year.
The big winner was DreamWorks Animation, up 59% after Comcast’s NBCU agreed to buy the company behind Shrek and Kung Fu Panda.
TiVo rose 14%, also due to a merger announcement. The DVR pioneer is being acquired by Rovi, best known for its onscreen TV guides.
Also faring well were the movie exhibition companies, despite expected challenges with this Summer’s slate. Again, consolidation is a Key reason for Bullishness.
Carmike Cinemas has received a buyout offer from AMC Entertainment (NYSE:AMC) and the former is + 31%, the latter is +16% YTD. Regal Entertainment shares are + 19% and Cinemark’s are + 11%.
Have a terrific 4th of July Holiday weekend.