The big sell-off, resulting from credit concerns and the housing crisis, started as worldwide markets tumbled overnight on Monday. U.S. stock markets have been in free fall since the beginning of the year--culminating in two massive triple-digit point drops last week.
Since the beginning of the year, big media stocks have tumbled as well--already down as a group in 2007. So far in 2008, Walt Disney shares are down 11.7%, News Corp. is off around 9%, and Time Warner's stock has slipped 6%.
Media stocks have been pulled down in concert with the rest of the market in the belief that a U.S. recession has arrived or is close at hand, according to analysts. The finger is also pointed at a potentially weaker advertising market that impacts these stocks.
In mid-day trading yesterday, Sony Corp. was off a big 3.5% to $49.60 and Time Warner was down 3.4% to $15.01. Lesser losers on the day were Walt Disney, with a 1.8% cut to $28.00; CBS, with a 1.7% drop to $22.70; Viacom, with a 1.4% cut to $37.65; and News Corp., with a 1.4% slip to 18.42.
Other radio and TV stocks also suffered. Clear Channel Communications was down a big 5.3% to $31.77; XM Satellite Radio tumbled 4% to $10.70; Westwood One suffered almost a 10% loss to $1.59; and Meredith Corp. slipped 3.6% to $38.20.
Clear Channel is in the midst of a proposed sale to take the company private. The latest proposal meant that stockholders would get $39.20 in cash for each share they own--plus additional consideration if the merger's closing occurs after Dec. 31.
Radio stocks have been particularly hurt in recent years because of an ailing advertising market.