SBS shares doubled on Tuesday


Shares of Spanish Broadcasting System jumped 102% on Tuesday. That’s only $1.51, but it took the stock – recently below a buck – to just a penny away from $3 at the closing bell. What happened?

Not much. At least not anything of real consequence.

An online site focusing on small capitalization stocks, appropriately named Small Cap Network, took note of Monday’s 39% rise for SBS – still, that’s only 42 cents – and used that as the impetus for an article on Spanish media stocks. It focused on two Mexican broadcasters with US-traded stock (neither of which is a small cap stock) and SBS (strangely leaving out Entravision). The article didn’t actually recommend any of the stocks, and in fact raised some warning flags, but just being mentioned may have introduced SBS to some risk-taking investors who were unaware of the company. The stock has, after all, fallen more than 80% in the past year, so maybe it’s due for a rebound. Or maybe that’s a self-fulfilling prophecy if enough people take the gamble.

At the same time, SBS CEO Raul Alarcon filed an SEC statement that he exercised 10,000 Class A stock options at $1.03. That’s not a very big deal, given the small amount of money involved and the fact that he already owns millions of shares – mostly the super-voting Class B shares that give him voting control of the company. But at least it shows some management confidence in the company’s future.

RBR-TVBR observation: In short, there was no real news to boost the stock, but a couple of minor occurrences. The coincidence of timing appears to have been good news for long-suffering SBS shareholders – but only if the company can support the rising stock price.