Apparently Cablevision Systems Corp.'s sweeping changes weren't sweeping
enough in the minds of some investors, who drove the stock down as much as 26
percent - or $2.03 per share to $5.81 - in trading Thursday after the company
announced a major restructuring.
Cablevision stock closed at $6.60 each on Thursday, down $1.24 per share, or
Cablevision said Thursday that it would implement a number of changes aimed
at closing a $550 million funding gap in 2003, including:
- paring its workforce by 7 percent
- cutting capital expenditures
- selling off its Clearview Cinema holdings
- shuttering 26 unprofitable The Wiz electronics stores and
- putting a planned New York City pilot launch of wireless phone service on
But investors apparently were looking for something more dramatic - namely an
announcement that the company would sell one or all of its Rainbow Media Group
programming assets (including American Movie Classics, Bravo, the Independent
Film Channel and WE: Women's Entertainment) to bridge the gap.
Moody's Investors Service downgraded Cablevision debt by two notches on
Thursday, adding that while the company has made strides to close the 2003
funding gap, 'lingering concerns' remain.
In a conference call with analysts, Cablevision vice chairman Bill Bell said
that the networks weren't for sale now, but hinted that might not always be the
'We never said we never intend to sell assets, we said we don't have to,'
Bell said on the call.
One asset that Cablevision CEO James Dolan said the company would hold onto
is its direct broadcast satellite venture, which the company has already
committed $140 million to. Many analysts expected the DBS venture to be either
scrapped or sold.
'We still believe the satellite project can be an important project,' Dolan
said. 'We still believe the project is worth investing in.'