Why Did Media Stocks Slide? Thank Tronc and Gannett
It was a down day on Wall Street Thursday as the Dow Jones Industrial Average posted a 29.65-point decline, to 18,169.68. Nasdaq was off 34.29, to 5,215.97.
Look no further than Gannett Co.
The newspaper publishing company reported a loss of $24.24 million (-21 cents per share) in Q3, compared to earnings of $39.2 million (+33 cents per share). Adjusted earnings for Q3 came in at 6 cents, off from 43 cents in Q3 2015, this was below the consensus estimate of 19 cents from FactSet, MarketWatch reports.
To compound matters, Bloomberg reported an hour before market close that the banks financing Gannett’s potential takeover of Tronc Inc. – the print company carved out of Tribune Co. in August 2014 – have backed out after lenders expressed concerns about the health of the two newspaper-heavy companies.
Investors revolted, sending Gannett down a colossal 17.1%, to $8.21. Meanwhile Tronc stock slid a whopping 27.8%, finishing at $12.27.
Other media entities weren’t immune to the newspaper owners’ woes. Sinclair Broadcast Group fell 4.1%, to $24.80; News Corp. was off 4.2%, to $12.60; McClatchy Co. dipped 4.2%, to $15.08; and Beasley Broadcast Group slid 5.6%, to $4.77. This resulted in no gainers in Thursday’s trading on the RBR Radio Index and TVBR Television Index.
The RBR Radio Index fell 12.935, or 2.19%, to 576.395.
The TVBR Television Index fell 19.703, or 2.24%, to 859.951.
Beasley, down 5.6%
Gray, down 5.4%
Nexstar, down 4.2%