Stock tumbles as Messier moves to N.Y.
NEW YORK — Vivendi Universal stock took a tumble Thursday — its third in as many days — as Wall Street gave CEO Jean-Marie Messier a lukewarm welcome Stateside.
The French exec officially relocated from Paris to Gotham this week, along with Vivendi U’s chief financial officer Guillaume Hannezo and exec VP of public relations Catherine Gros. The conglom’s top brass badly want to expand the company’s investor base in the U.S. and boost its profile here with financial markets and in the press.
The stock’s current rough ride demonstrates they’ve got their work cut out for them. The share price has plunged nearly 16% this week. On Thursday alone, shares fell 8% to close at $46.09.
Market players pointed to the weak advertising climate that’s hit media stocks as well as a series of other events, such as rumors earlier in the week, flat-out denied by Messier, that Vivendi was in talks to acquire U.S. Internet giant Yahoo! News came Tuesday that Vivendi had completed a deal worth about $600 million to gain control of the debt-laden and unprofitable telecom business of Poland’s Elektrim — an accord investors neither understand nor appreciate. In addition, the week witnessed a general downturn in the European telecom sector, which counts Vivendi among its members.
Messier’s challenge will be to sell investors on the synergies among Vivendi’s various businesses, including the Cegetel telco biz, Canal Plus, Universal Studios, Universal Music, newly acquired Boston-based educational publisher Houghton Mifflin, videogames and the Internet. He’ll be pushing Vivendi’s story at various investor conferences this fall on both coasts, starting Oct. 2 at the Goldman Sachs media conference.
“U.S. media investors don’t understand the company. The financial information they provide can be very easily manipulated, and I’m scared to death of Vizzavi,” said one prominent U.S. fund manager. He was referring to the much-hyped wireless Internet portal Vivendi launched last year with a hefty cash investment and grand plans of rolling it out rapidly across Europe.
During a recent call with analysts, however, Messier’s comments on Vizzavi were dramatically toned down, and he acknowledged some unexpected delays in expanding the service.
Financial reporting is another sore spot. Since its merger, Vivendi has issued a confusing number of earnings and financial updates that don’t seem to gather together all the necessary numbers in one place — including those of its majority-controlled French subsidiary Vivendi Environment. The latest report in July provided only first-half revenue and cash-flow figures for its media operations. Company reps have promised this will change sometime next year when Vivendi U adopts U.S. accounting practices.