AMC Networks Stock Falls After Spin-Off
NEW YORK - The stock of cable networks group AMC Networks, which is now a separate company after the completion of the spin-off from cable operator Cablevision Systems, dropped more than 8 percent Friday as it made its official market debut on Nasdaq under ticker symbol AMCX.
The stock closed at $39.85, down 8.4 percent from where it was indicated to trade as of Thursday's market close. The stock has been trading on a so-called "when-issued" basis in recent weeks - as is common in the case of spin-offs.
The company's networks include AMC, IFC, Sundance Channel and WE tv.
Analysts have largely started coverage of AMC with "buy" ratings and price targets in the $40-$50 range.
But Barclays Capital analyst Anthony DiClemente on Friday initiated the stock with an "underweight" rating and $32 target, citing an "expensive valuation" relative to other cable pure-plays, such as Scripps Networks Interactive and Discovery Communications, limited near-term upside for affiliate fee growth, "moderating ad revenue growth versus peers and "a two-year waiting period for a tax-free sale," among other things. Also, Maxim Group analyst John Tinker downgraded the stock from "buy" to "hold," citing what he argued is a high price.
“This is an important moment for AMC Networks, which has a long history of innovation and excellence in creating compelling programming for targeted audiences," said executive chairman Charles Dolan, who is also chairman of Cablevision, on Friday. "We look forward to building on those achievements and believe that the company is well positioned for today’s marketplace under the leadership of Josh Sapan and his excellent management team.”
President and CEO Sapan said: "Over the past thirty years, we have created brands and content designed to serve targeted demographic audiences. Now, as a separate public company, AMC Networks has the opportunity to further showcase each of its programming services and provide value to investors, distributors and advertisers.”