Lionsgate Stock Loss Means Far Less Funding
Wednesday, February 11, 2009 12:30PM - By David Hall
Everyone was flipping out last Fall when major stocks were tumbling uncontrollably on Wall Street, and there is now cause for more commotion as the film industry falls deeper into the distressful milieu.
Lions Gate Entertainment reported a third-quarter loss of $93.4 million on Monday, compared with a $7.3 million profit in the same quarter last year. To make matters worse, film-financing investors Pride Pictures observed those results, and pulled out of a multi-film funding agreement Tuesday [Los Angeles Times], which will mean a $65 million drop in Lionsgate’s cash flow.
This action caused shares to drop a whopping 27%, or $1.43 to $3.90 per share, their lowest level since 2003. Lionsgate execs blamed the losses on “underperforming” releases, including The Spirit, Punisher: War Zone and Transporter 3 [Variety].
