AMC Networks says this morning that its board has increased the company’s stock repurchase authorization by $500 million — giving itself, and its stock, a vote of confidence following a month when the share price declined about 10.4%.
This morning’s news contributed to a slight lift in AMC’s stock price in pre-market trading.
The new authorization adds to the $500 million repurchase plan AMC’s board approved in early 2016.
CFO Sean Sullivan told analysts early last month that the company had $147 million left in that program, after repurchasing about 9% of the outstanding shares.
He said then that AMC sees its stock as “an attractive investment alternative” and would “take advantage of this opportunity.”
FBN Securities’ Robert Routh said shortly afterward that it was “reasonable to believe another repurchase authorization will be announced at some point in the future, especially given where the shares presently are.”
The company’s shares have been under pressure as investors questioned the independent programmer’s prospects in a world of skinny bundles, industry wide softening of TV ad sales, and slipping ratings for its most popular program: The Walking Dead.
Evercore ISI’s David Joyce said last month that stand alone cable networks “may face scale challenges in time” and that AMC’s trading price reflected cord-cutting fears that “have affected sentiment and valuation multiples for the peers.”
CEO Josh Sapan told analysts, in a May 4 briefing, that he has “always believed in the value of having a strong portfolio with five clearly defined networks that mean something important to their audiences, and we’ve always believed in the value of investing in shows with passionate creators and top talent. This approach is what has set AMC Networks apart from other channel groups and is enabling us to operate today from a strong competitive position in an evolving landscape.”
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