German market was cash cow for H'wood
BERLIN — Germany’s once-hot Neuer Markt is closing down and will be replaced by a more stringently regulated listing sector, the Prime Standard.
The collapse of the Neuer Markt is one more nail in the coffin for formerly high-spending Teutonic media players who used their stock quotes to catapult themselves onto the world stage.
The end of the Neuer Markt also finally should dispel any notion in Hollywood that Germany is an easy place to raise money.
While dozens of pics benefited from the go-go days of the Neuer Markt, Intermedia Films produced more than any other publicly traded company. Among the movie that took advantage of the Neuer Markt’s largesse since Intermedia went public in May 2000 are “K-19: The Widowmaker” and “Enigma” as well as an upcoming slate that includes “Terminator 3: Rise of the Machines,” “Basic” and “Dark Blue.”
However, like most media companies’, Intermedia’s stock has suffered greatly in the last year. It currently trades at S.68 (66¢) per share.
However, Intermedia TK Moritz Borman said that the dissolving of the Neuer Markt came as good news.
“I think it’s very good,” he told Daily Variety. “It gets rid of the stigma of the Neuer Markt, which lost such huge value, and it moves companies that meet the requirements into the Prime Standard. Intermedia will be in the same segment as the other big companies.”
Teutonic media companies that have survived have mostly moved to the German stock exchange’s more generic and less costly regulated exchange.
In the past nine months, a half-dozen film and TV outfits have exited the board, including Kinowelt, H5B5, Helkon, F.A.M.E. and kidvidder RTV.
The closure had been expected for some time and is part of a complete overhaul of stock listings in Germany by the Deutsche Borse, which is seeking to streamline operations by setting up two listing segments: the Domestic Standard, with minimum legal transparency requirements, and the Prime Standard, which will require additional transparency guarantees.
Designed to give issuers access to the international capital markets, the Prime Standard will demand quarterly reports, international accounting standards (either GAAP or IAS), presentation of a corporate calendar, at least one analyst conference per year, and ad-hoc disclosures and ongoing reporting in English.
The Prime Standard replaces the Neuer Markt as well as the Smax segment for small companies, which will be discontinued by the end of 2003 at the latest.
“We want to organize our markets consistently in line with investors’ needs in the future,” said Deutsche Borse executive board member Volker Potthoff. “To do this, we will safeguard maximum transparency with clear rules and provide a consistent world index to support their investment decisions.”
Decision to shutter Neuer Markt ends a roller-coaster era that began in the mid-1990s and opened the stock exchange to average Germans for the first time.
Neuer Markt listings fueled media and tech players to stratospheric heights and for a few years made Hollywood take notice of cash-rich Teutonic film buyers whose unhampered spending sent prices of U.S. film and TV product soaring.
The trip down was similarly dramatic, often leaving devastation in its wake.