Media stocks already were having a rough time and Monday’s stock market plunge, to which China is largely given credit, isn’t helping.
The Dow Jones Industrial Average was down more than 1,000 points on Monday morning, or more than five percent, after falling more than 500 on Friday and more than 300 on Thursday, according to Multichannel News. By early afternoon, however, the Dow had recovered some 800 points (and climbing).
Still, entertainment stocks continued to take hits, with 21st Century Fox, CBS, Disney, Netflix Sony, Time Warner and Viacom all down. Netflix, in whose stock had climbed to nearly $120 per share after a seven-for-one split, fell below the $100 mark on Monday.
Cable operators also fell, with Cablevision leading the decline, followed by Charter, Time Warner Cable and Comcast, according to Multichannel News.
Tech was not exempt either, with Apple, Discovery, Dish and Twitter falling to 52-week lows, reported Variety, with Facebook also taking a hit.
Doug Creutz, analyst with Cowen & Co., noted last Friday that the overall valuation of “Big Media” has dropped $70 billion over the past two weeks, according to Variety.
While difficulties in the Chinese economy are finally hitting the U.S., media stocks have been impacted by fundamental questions about the solidity of their business models, with subscribers departing in droves for less expensive streaming services.
Read more: THR, Variety, Multichannel News
Brief Take: The overall market volatility is more a result of global economic adjustments, particularly in China, while media’s problems are rooted in the challenging fundamentals of their changing businesses.
Image courtesy of The Hollywood Reporter.
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