Mediaset slips on article, downgrades
Shares tumble more than 2.5% before recoveringROME -- Mediaset shares fell more than 2.5% Tuesday before recovering at the bell to trim their losses to half that after a major newspaper ran a story questioning the company's health and two investment banks downgraded the shares.
The Rome daily La Repubblica said in Tuesday's business section that it was "pessimistic" about the broadcast giant's prospects amid an eroding ad market, weak sales for Mediaset content and rules that prevent Prime Minister Silvio Berlusconi, Mediaset's leading shareholder, from directing state ad money to the broadcaster as he did during three previous stints in office.
Meanwhile, JPMorgan lowered its 12-month price target on the shares to 4.40 euros ($6.86) from 4.90 euros ($7.64) and investment banker Hildebrandt and Ferrar reduced its rating to "hold" from "accumulate."
"Circumstances are looking increasingly unfavorable" for the shares, Hildebrandt and Ferrar chief economist Javier Noriega said in an interview.
The shares slipped out of the gate Tuesday before recovering somewhat on what Noriega said was a round of bargain hunting just before the final bell. The shares closed down 1.2% at 4.30 euros ($6.71) amid a weak overall market on the Milan bourse.