Friday, June 27, 2008

Canwest Deathwatch

Another day, another all-time low. As of 1 p.m., 350,000 shares traded, all of them at a loss to the owners. Now testing $2.75.

Our timid financial media still shies away from talking about this collapse. The Globe noted in passing yesterday that Moody's recently downgraded the ratings of $1.7 billion of Canwest's commercial paper, but the reporter neglected to say what the new rating is. However, the downgrading is mentioned in a story about potential defaults.

UPDATE

At 3 p.m., it had fallen through $2.75, with nearly 500,000 shares sold.

This stock seriously looks like it could be heading off the main exchange and into the Venture Exchange. It's already been delisted in New York.

Meanwhile, Moody's expects a large number of Canadian corporate bond defaults this year.

2 comments:

Anonymous said...

Will be interesting to see what happens later next week. No doubt, lots of sales due to the end of the second quarter/end of the month. No vote of confidence anyway.
And lots of people shorting Canwest by the look of it.

http://www.financialpost.com/markets/market_data/market-short_pos.html

Ottawa Watch said...

I do think this is a transition, not a destination. The destination is somewhere away from the content convergence model. This company is a textbook case of a corporation that simply does not have the intellectual and management depth to run cross-platform media. So far, no one has been able to make content convergence work. Now, technological convergence -- say, computer/TV/theatrical downloads, wireless Internet/telephone/music downloads/TV -- is miles ahead and making tons of money, ala RIM.