Mediaset Shares Plummet as Silvio Berlusconi Faces Political Uncertainty
ROME – With Italian media mogul-turned-Prime Minister Silvio Berlusconi in the midst of the most serious crisis of his political career, it seems shareholders of Mediaset, the broadcast and cinema giant he controls, are among those paying the price.
Hounded by plummeting approval levels, a sluggish economy, a series of sex scandals, charges of influence peddling, and the defection of key allies, the future of Berlusconi's government has become clouded in doubt.
Late Wednesday, it was announced the government would face a no-confidence vote on Dec. 14. If Berlusconi and his allies lose, he will be out of power pending new elections.
With Berlusconi focusing on his political survival, his stewardship of Mediaset -- the Milan-based powerhouse that controls three television networks and the Medusa film production and distribution house -- has waned.
The shares have suffered as a result. Shares of Mediaset opened trading Thursday at €4.69 ($6.60) and immediately fell 1% to their lowest levels since early July. In the six full trading days since Nov. 10, after the political crisis came to a head with the defection of a key ally, the shares have fallen nearly 14%, erasing a startling €935 million ($1.32 billion) from the companies market capitalization. Over the same time, the broader media market on the Milan exchange was up nearly 1% if Mediaset shares are removed from the equation.
Other Berlusconi holdings in the publishing, pharmaceutical, and banking sectors have also fallen over the same period. But none as much as Mediaset, which has been downgraded by several investment houses in recent days.
"The perception is that if Silvio Berlusconi is distracted, that that can only be bad news for Mediaset," Javier Noriega, chief economist with investment bankers Hildebrant and Ferrar, said in an interview.
A spokesman for Mediaset did not immediately respond to requests for comment.
- MOST SHARED
- MOST POPULAR
- American Horror Story’s Gabourey Sidibe on Queenie’s Fate, Twerking on Kathy Bates, and Sundance Perks
- Ryan Murphy Talks Self-Policing, Jessica Lange’s Exit, and What’s Next on American Horror Story: Coven
- FX Orders Middle Eastern Political Drama Tyrant
- Fact-Checking the Age-Old Rumors of Walt Disney’s Dark Side