Traditional and New Media Stocks Are Both Losers in 2018's First Quarter
Among Wall Street's concerns with the entertainment industry is the fact that the entrenched players are losing ground to streaming companies.
Here's something you don't hear often: Shares of the mighty Facebook, Google and Apple finished down for the quarter.
Facebook, Google and Apple were off 9 percent, 1 percent and 1 percent, respectively, with Facebook's well-publicized issues regarding user privacy surrounding the most recent presidential election being one large controversy that sent digital stocks reeling — then partially recovering — during the quarter.
On a more familiar note, at least in the President Donald Trump era, shares of most traditional media companies were also lower, with names like AMC Networks off 4 percent, Charter Communications down 7 percent and Dish Network down 21 percent.
Among the seven big media conglomerates, Sony fared well, gaining 8 percent in the first quarter of 2018, which ended on Friday, but Disney, CBS and Comcast were down 7 percent, 13 percent and 14 percent, respectively.
Managing gains were 21st Century Fox (up 7 percent) and Time Warner (up 4 percent), though those names were propped up by merger agreements, as AT&T is trying to pay $85.4 billion for Time Warner and Disney is attempting to pay $52.4 billion for most of the assets of Fox (both deals await regulatory approval).
Likewise, Viacom gained 1 percent on the quarter, as all indications are that CBS will pay a premium to acquire the parent of Nickelodeon, MTV and Comedy Central.
Other losers in the quarter include theater owners AMC Entertainment (off 6 percent) and Imax (down 13 percent), as well as Lionsgate (down 24 percent), Sinclair Broadcast (off 17 percent) and streaming-player maker Roku (down 40 percent).
In fact, of the 50 media stocks tracked by The Hollywood Reporter, only 17 of them outperformed the S&P 500, which lost 1.6 percent during the quarter.
Among Wall Street's concerns with the entertainment industry is the fact that the entrenched players are losing ground to streaming companies. Indeed, the king of streaming, Netflix, saw its shares rocket 54 percent in the first quarter of the year, while Amazon notched a 24 percent gain.