Stock Pain Muted1/25/2008 7:00 PM Eastern
Stock-market turmoil didn’t hurt already battered cable operators much over the past two weeks, with analysts figuring the tough economic news that has shaken global markets already was reflected in operator stock values.
The Dow Jones Industrial Average lost nearly 400 points between Jan. 14 and Jan. 24. Investors have bailed from nearly every sector amid fears a recession was looming.
|Amid market turmoil, cable stocks haven’t lost much (more).|
The Dow began to rebound on Jan. 23, adding 298.98 points to close at 12,270.17. The upturn continued on Jan. 24, up 108.44 points to 12,378.61 — far below the Jan. 14 close of 12,778.15.
Cable’s worst day was Jan. 22, when the shares of the six publicly traded operators dropped 3%.
But economic hardships have already taken their toll on cable stocks, along with concerns about increased competition and declining basic subscriber rolls.
Stocks in the six cable system operators dropped 28% in 2006 and are down a collective 6.7% thus far in 2008.
Cablevision Systems has declined the most since Jan. 1, down nearly 8%.
“Most of the bad news was already baked into the stocks,” according to Miller Tabak media analyst David Joyce.
Comcast led the losers on Jan. 22, after an institutional investor called for the ouster of CEO Brian Roberts. Comcast dipped 2.2% (down 38 cents) to $16.65 on Jan. 22, but rose in subsequent trading, closing at $17.44 on Jan. 24, down 23 cents (1.3%) from the Jan. 14 close of $17.67.
Time Warner Cable actually showed a tiny gain, to $24.99 on Jan. 24 from $24.91 on Jan. 14.
Cablevision dipped 7.5% during the 10-day period to $22.17 from $23.98 on Jan. 14, followed by Time Warner Inc. (down 4.9% to $15.43); Mediacom (down 9.6% to $4.61) and Charter (down 5.1% to $1.11).
Joyce said Mediacom likely dropped so much because it’s lightly traded. “When the market hits a rough patch, the less liquid stuff gets sold first,” he said.