Blame the FCC Chairman for dual nose-dives for Sinclair Broadcast Group and Tribune Media in Monday’s trading. Within moments of the release of a statement from Ajit Pai that put the companies’ merger into question, investors went into sell mode. At the Closing Bell, SBGI was down nearly 12%, while Tribune was off by close to 17%.
For Sinclair, volume was massive, at 6.12 million shares; average volume for the company is 1.485 million shares. Today’s dip erased all gains seen since June 7, and with Monday’s statement from Chairman Pai all bets are off that Sinclair can stay above a 52-week low of $26.50. Further, Sinclair stock has not closed below $24 a share since August 2013.
Tribune’s dip was far more severe: Volume was a stunning 13.1 million shares; average volume is 899,734 shares. Sell after sell came in midday and afternoon trading, leaving Tribune at $32.12 — down $6.45 from Friday.
It was January 2017 when Tribune shares were last at this level — and it was short-lived.
Meanwhile, in June 2014 Tribune stock was valued as high as $85.05.
The potential collapse of the merger between Tribune and Sinclair is far more catastrophic for Tribune, which has trimmed its production budgets and restructured its TV operation in preparation for a combination of assets with Sinclair.
If that doesn’t happen, Tribune will likely go sniffing for another buyer — with potential suitor Nexstar Media Group looking very nice to Apollo Global Management, Reuters reports.
Nexstar shares were impacted by Pai’s statement, falling 4.6% to $78.70 after reaching a new high.