Canwest was at $2.35 this morning, another new low. A month ago, it traded at $3.60, which was a 52-week low.
The stock took a little bounce today, to a pathetic $2.55 before settling back to $2.38, just above the all-time low. Lots of trades: over 800,000 of this dog.
Maybe it ticked up because the company got financing for the Alliance-Atlantis takeover. Maybe it ticked down again because investors saw the 13.5% rate Canwest must pay on its $300 million worth of new junk bonds issued to finance the deal.
I'm going to be without internet all next week, so I'll be curious to see where this goes and what shakes out of it.
ORIGINAL WEDNESDAY POST
Oh, to have sold this puppy short a year ago. Now down 75% from its one-year high, there hasn't been any sign of a dead cat bounce. Even accounting for trades to the many, many people who actually got off their asses and sold Canwest short, the stock trades at a new low yet again.
Two years ago, when Dominion Bond Rating listed Canwest bonds as "BB" (speculative), with the risk of default, the stock traded at about $8.50, with about 50,000 trades a day. Now, about 500,000 to 700,000 shares trade hands each day, always in capitulation trading as the stock hasn't risen substantially in months and almost always trades at all-time lows.
The CRTC has not been able to save this dog with its very under-reported new policy of allowing greater foreign ownership of Canadian media companies. I think they are about seven years too late.
And in the "they can't keep talent" department, the Vancouver Sun just lost its veteran City Hall reporter.
And Bill Southam pegged out yesterday, with an ironic sense of timing.
Today, it broke through the $2.50 barrier. If it goes below $2 and stays there long, it either ends up trading as a penny stock on the over-the-counter exchange or has to pull a Nortel, which did a one-for-ten share swap several years ago to give itself a respectable-looking stock price.
Pretty sad situation for Canada's largest media company.
Canwest's much-touted Australian holding TEN is forced to buy back shares to prevent a stockholder revolt. The stock is at AU $1.35, a ten-year low. Last year, the Aspers turned down an offer of $2.90 a share. Unlike in Canada, there's a media buyer interested in the company's assets and is picking up shares at fire sale prices. In Canada, shares are being bought up by a corporate dismantler.
And on July 11, Canwest will hold a conference call with reporters to talk about their first-quarter results. Unfortunately, I'm away all next week trying to find a long-lost fossil locality in the Eastern Townships.