DreamWorks Animation Shares Touch 52-Week Low
The stock is down about 1% in early afternoon trading after taking a hit early this morning following B. Riley’s Eric Wold’s decision to abandon his “buy” recommendation. It touched $21.90, a 12-month low, after the analyst dropped his price target nearly 22% to $25. Wold acknowledged that his upgrade in March, when the stock value was 23% higher, “proved to be ill-timed and premature.” He calls the box office for How To Train Your Dragon 2 “disappointing” which “may turn DWA into a ‘show me’ stock and keep a ceiling on valuations until more consistent box office results develop.” The good news? Wold still likes DWA’s plans to diversify and expand its TV production. He also says that Dragon shouldn’t require a write-down.
Aereo’s Effort To Define Itself As A Cable Company Could Backfire At FCC: Analyst
Aereo may have bought some time with its attempt to redefine itself as a cable company, but it likely won’t succeed, Guggenheim Securities’ Paul Gallant says this morning. He figures that U.S. District Court Judge Amy Nathan — who’s overseeing broadcasters’ plea for an injunction to shutter the streaming service — will want to hear additional arguments after the U.S. Supreme Court recently ruled that Aereo could not take over-the-air signals without payment. Justices likened it to a cable company: Copyright law gives operators the right to a compulsory license, which enables them to carry broadcast signals if they pay a relatively low fee set by the Copyright Office. But if the FCC also deems Aereo to be a cable service, then it would be covered by the Communications Act which requires operators to negotiate with broadcasters for the right to carry their signals. “The combined influence of cable/telcos, content companies, and broadcasters would be a formidable lobbying force in favor of the FCC classifying Aereo as [a cable system],” Gallant says.
Shares In Pure Play Cable Networks Could Hit Turbulence: Analyst
Discovery, Scripps Networks and AMC Networks are among the companies that may be in for a rough period especially when they release their Q2 results, MoffettNathanson Research’s Michael Nathanson says today. Investors are concerned about the decline in aggregate viewing, slowing growth in ad sales, the increase in costs to produce original programming, and consolidation deals led by Comcast/Time Warner Cable and AT&T/DirecTV. “Perhaps the only reasons the stocks are not down more is due to increased hopes that M&A possibilities among the pure play cable networks are just around the corner,” he says. “This makes the short case for the group a much more difficult and riskier decision.”