Media and Entertainment Stocks Beaten Up Badly With Rest of Market
The impetus for Wednesday's Wall Street sell-off is twofold: Rising interest rates eventually depress stocks and a rapid rise over the past couple of years has many investors fearing a correction, so when strong selling occurs it encourages others to also sell.
A horrendous day on Wall Street did not spare entertainment and media stocks, as all 50 of the companies tracked by The Hollywood Reporter saw their shares fall precipitously on Wednesday.
That THR's entire index of stocks would fall in-sync on a single day is a rarity that has happened only a few times in the past two decades, most notably a few times when the internet bubble burst at the turn of the century and the Nasdaq lost half its value in two years.
The impetus for Wednesday's sell-off is twofold: Rising interest rates eventually depress stocks and a rapid rise over the past couple of years has many investors fearing a correction, so when strong selling occurs it encourages others to also sell.
The Dow Jones fell 831.83, or 3.2 percent, while the Nasdaq was off 315.97, or 4.1 percent.
Disney was down 3.4 percent, Comcast sunk 3.3 percent, Sony was down 3.2 percent, CBS fell 3.3 percent, Viacom was off 2.7 percent and AT&T, the parent of WarnerMedia and DirecTV, was off 1.9 percent. Even 21st Century Fox, which is mostly being acquired by Disney, dropped 1.9 percent.
That shares of CBS fell might be of particular concern given rumors that the media conglomerate could be searching for a buyer once a probe into sexual misconduct allegations against former CEO Les Moonves concludes.
In new media the carnage was worse, with Netflix dropping 8.4 percent, Facebook down 4.1 percent, Google off 5.1 percent, Amazon off 6.2 percent, Apple down 4.6 percent, Twitter off 8.4 percent and TiVo down 5.9 percent.
Shares of Tesla also fell on Wednesday, by a relatively modest 2.5 percent. Several reports surfaced Wednesday saying that the car maker might tap Fox CEO James Murdoch, already a Tesla director, to replace Elon Musk as chairman of its board.