Viacom and Time Warner Survive Brutal January for Media Stocks
Among the month's big losers were Pandora, Twitter, Lionsgate and Netflix.
January marked one of Wall Street's most volatile starts to a new year in recent memory, where daily swings of 200 points or more for the Dow Jones Industrial Average were commonplace. Now that the month's trading has ended, it appears media was among the choppiest sectors, with many stocks falling hard.
Viacom — battered for a couple of years due to cord-cutting, falling ratings at some of its TV networks and lackluster results from Paramount — was one of the biggest winners in the industry in January, up 11 percent during the month.
Time Warner also fared well, gaining 9 percent in January as the conglomerate is still seen by many to be a takeover target. It ended the month with a market capitalization of $56.3 billion, and it has already turned down an $80 billion offer from 21st Century Fox.
Despite concerns over cord-cutting, Scripps Networks Interactive performed well, gaining 10 percent in January as investors remain bullish on HGTV, Great American Country, Food Network and other popular niche channels.
At the other end of the spectrum were a couple of new-media stocks: Twitter and Pandora Media, down a whopping 29 percent and 28 percent, respectively, in January.
Twitter will report fourth-quarter earnings on Feb. 10, and analysts worry the social-media company won't post satisfactory growth in monthly active users, which was at 320 million in the third quarter.
As for Pandora, investors worry that its listener base may have peaked at about 80 million, so revenue growth may have to come from more advertising, which isn't exactly a user-friendly strategy.
Other major losers faring much worse than the 5 percent loss suffered by the S&P 500 included Lionsgate, which reports quarterly financials Thursday and lost 19 percent of its value in January. Some analysts have reined in their earnings expectations after weaker-than-expected box office for The Hunger Games: Mockingjay — Part 2, which earned $651.3 million worldwide.
Imax had a nice day on Friday, its stock rising 9 percent, but it ended January down 13 percent. The poor showing came despite the fact that Star Wars: The Force Awakens hit $200 million on Imax screens in 35 days, a record.
Sony also had a great day on Friday, its stock rising 18 percent after the conglomerate posted better earnings than expected, largely due to the performance of the James Bond movie Spectre and the latest album from Adele. The impressive one-day gain, though, wasn't enough to propel Sony into the winner's column, as the stock fell 3 percent on the month.
Even Netflix, a Wall Street darling for several years, dropped 20 percent in January. No matter, though, as the stock is up 290 percent in the past three years.
Of the 50 media-entertainment stocks tracked by The Hollywood Reporter, only 12 ended January higher than where they started. Below are the top 10 winners in January and the the top 10 losers.
1. Viacom, up 10.9 percent.
2. Scripps Networks Interactive, up 10.4 percent.
3. Time Warner, up 8.9 percent.
4. Facebook, up 7.2 percent.
5. AT&T, up 6.3 percent.
6. Discovery Communications, up 3.4 percent.
7. Nielsen Holdings, up 3.3 percent.
8. Sinclair Broadcast Group, up 1.4 percent.
9. CBS, up 0.8 percent.
10. World Wrestling Entertainment, up 0.3 percent.
1. Twitter, down 28.7 percent.
2. Pandora Media, down 27.5 percent.
3. Salem Media Group, down 21.9 percent.
4. Netflix, down 19.8 percent.
5. Lionsgate, down 19.3 percent.
6. Alibaba Group, down 17.5 percent.
7. IAC/InterActiveCorp, down 15.6 percent.
8. Dish Network, down 15.6 percent.
9. Starz, down 15.1 percent.
10. Amazon.com, down 13.2 percent.