A November reign for new media
EmptyShares of TiVo Inc. and Imax Corp. were crushed in November. But as far as the new-media sector at large goes, they appeared to be the exception rather than the rule, as many media companies with a high-tech focus outperformed the Nasdaq.
Barry Diller's IAC/InterActiveCorp, for example, rose 17.8% last month, while XM Satellite Radio shares were 23.8% higher. The Nasdaq was up 2.7%.
One catalyst for IAC was its inclusion into the S&P 500 index. The stock even shrugged off a late-month downgrade from Merrill Lynch from "buy" to "neutral" because the firm fretted over IAC's high valuation.
As for XM, analysts said that so much bad news already had been priced into the stock that it was simply due for a rise. The stock remains one of the worst performers for the year, down 47%, on The Hollywood Reporter's Showbiz 50 index.
Microsoft Corp., which not only launched its digital-music device Zune but also its hotly anticipated Windows Vista, saw its shares rise 2.6% last month.
Research firm NPD said Thursday that Zune has garnered about a 9% share of the domestic digital-music player market, already making it No. 2 to Apple Computer Inc.'s iPod.
The iPod is at or near the top of several lists of hot-selling holiday gifts this year. EBay, for example, calls the iPod 8GB its sixth-hottest gift item. The first five, in order, are: PlayStation 3, TMX Elmo, Nintendo Wii, Zune and the "Cars" DVD.
Apple shares, which this week got a price-target boost to $100 on Wednesday from Bear Stearns analyst Andrew Neff, rose 13% last month to $91.66.
But while Apple and Microsoft have been benefiting from the launch of new products, or the popularity of slightly older ones, Sony Corp. didn't gain much traction last month from its massively hyped stateside introduction of the PS3. The company's American shares lost 3.8% on the month.
While Nintendo sold 600,000 Wii units in the Americas in the first eight days after its November launch, Sony hasn't said how many PS3s have sold. Sure, demand is off the charts, but Sony might have missed its goal of supplying U.S. stores with 400,000 PS3s. Analysts estimate that Sony only was able to ship 150,000 units to North America for its November launch.
Another highflier during the month was Verisign Inc. Not generally considered a media concern, Verisign is joint owner of the Jamba mobile phone entertainment company, its partner being News Corp.
Verisign shares surged 26.2% last month, much of it coming Thursday after the U.S. Department of Commerce approved a deal allowing the company to continue running the dot-com Internet registry through 2012.
Verisign has been operating the lucrative dot-com registry for seven years via a contract with the Internet Corporation for Assigned names and Numbers.
Yahoo! Inc. was the recipient of a late-month bullish analyst note from Merrill Lynch analyst Justin Post, who said "Yahoo!'s premium inventory remains a differentiated market for quality-conscious advertisers," and noted that Yahoo! boasts 4 billion daily page views globally, making it the most popular collection of Internet sites in the world.
Yahoo! shares were up 2.5% to $27.01 last month, 18.5% away from Post's $32 target.
As for the downside exceptions, Imax has seen its stock price drop like a stone since the company acknowledged that it was having no success finding a buyer. It was off 30.9% during the month.
TiVo shares took a beating Thursday, a day after reporting largely positive quarterly earnings but then offering a dismal outlook for the current quarter, causing analysts to rein in price targets and, in one case, downgrade the stock.
"TiVo lacks the ability to grow profitably given its current model," Oppenheimer & Co. analyst Alan Bezoza said in downgrading the stock to "sell."
The stock fell 11% for the month.