Viacom hardest hit with 5% drop
Media congloms weren’t spared the bloodbath as the Dow plummeted more than 300 points on Thursday.
Viacom was the hardest hit among the major companies, dropping 5% to close at $38.90, its lowest price since March. Sony got off easiest: Conglom lost just 2% of its value, aided by strong earnings for the recent quarter.
Other congloms suffered declines consistent with the rest of the market: Time Warner slid 3%, News Corp. and Disney dropped 2.5% and CBS fell 4%. Many companies’ stock prices remain relatively healthy by recent standards; CBS is up more than 20% compared to its share price a year ago, and Time Warner is up nearly 10%.
Drops on Wall Street were the result of bleak news about home sales and the subprime mortgage market. General economic news doesn’t have a sustained effect on media congloms. But a long-term market plunge would affect leisure spending, hammering media and entertainment stocks.
Viacom’s stock suffered amid reports of a feud between Sumner Redstone and his daughter, and one-time successor, Shari Redstone. Company’s stock is down about 15% since late May, when it hit the highest price since it split off from CBS.
News Corp. dropped about 2.5%, partially offsetting gains of 10% it has made since the company appeared to be on the verge of landing Dow Jones.
Financial-news firm stayed roughly flat on unusually light trading as investors await a decision by the Dow Jones-controlling Bancroft clan, which is expected to issue a final verdict on the News Corp. bid next week.