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Entertainment stocks, particularly those with significant television holdings, are being punished for the second consecutive day.
Two hours into the opening of the market, Viacom is down about 17 percent to $42 a share, 21st Century Fox is off 11 percent to under $28 a share, and Discovery has sunk 1 percent to about $28.50 a share. All three companies are at 52-week lows.
Beating earnings estimates can’t make up for revenue behind expectations. And leading analysts sound the alarm after Disney lowered its affiliate fee revenue guidance upon worries of cord-cutting and subscriber losses at ESPN.
Todd Juenger at Bernstein notes that the $37 billion in market value was wiped out for large cap media companies on Wednesday.
On an analyst call, Viacom chief executive Philippe Dauman called the stock sell-off “way overdone.” Juenger agrees, writing what’s happening is “much more severe than warranted”
Despite such sentiment, investors are clearly bailing on the big media companies at the moment. CBS is down nearly 3 percent to $49 and is flirting with a 52-week low. AMC is off nearly 9 percent to $71, wiping out six months of stock market gains.
As a sign of the times, Netflix is bucking the trend. The streaming company’s stock is up more than 1 percent to $125 as it continues to reach all-time highs.
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