BSkyB hammered on London market
BSkyBís shares tumbled a massive 4.9% yesterday on the London stock exchange. The reason was a negative report from investment bankers J P Morgan.
BSkyBís shares fell back to 471p. JP Morganís cut the company to underweight from overweight and slashed its price target to 560 pence from 700 pence. Indeed, Skyís fall from grace now means that their stock price is lower than at any time since August 2004 Ė with much of the good work done by James Murdoch over the past three years now undone.
The broker said it expects advertising revenue to slow because of the deteriorating economic environment. It added the uplift from broadband and lower churn has played out.
Another issue that the market has been discounting, said JP Morganís report, is any potential regulatory change arising from the ongoing probe of BSkyBís activities.
Earlier today, BSkyB COO Mike Darcy accused regulator Ofcom of ďtrying to prop upĒ the UKís broadcasting status quo. Darcy told a London conference that ďit is not the job of a regulator to protect the interests of a small group of favoured broadcasters. They should not be trying to prop up a model which has history and tradition on its side, but which faces substantial challenges going forward.Ē