Greg A. Taylor, CFA, BBACanWest Global Comm.CGS.VDON'T BUYDec 08, 2008
Automobiles are the biggest ad spenders globally. At spending is going to come down, it puts a lot of pressure on the stock. Also, conventional TV is in a bit of a slump right now.
Massive spike on volume recently. Don't act on just a couple of days of action; you want a few days. If it continues to rise that would indicate momentum is starting to move in its favour. RSI index spiked into overbought territory. Would like to see a few more days of action.
Media space is a very tough one right now. Newspapers are suffering from declining advertising lines and readership. In the TV space a pay-TV provider went out of business today and local stations are closing down. High debt. Sell as a tax loss.
At this stage it is basically trading like an option on its survivability. Terrible balance sheet with about $4 billion of debt. Management has not been great.
Laden with debt. Took on debt to buy Financial Post. Slow down in their Australian assets. Advertising is down on newspapers and television. High risk.
Just renegotiated covenants with their lenders, which is good except the lenders cut back on the amount they can borrow. Newspaper industry in North America is in a violent retraction. This sector will continue to be an anchor around their feet regardless of how well their television assets do.