German film stocks continued to fall despite stockmarket bouyancy over the recent holiday period as four companies lost at least a quarter of their value in the three weeks after December 15.
Intertainment was hardest hit, being stripped of almost two-thirds of its value as it waged a public war with its principal content supplier, the US' Franchise Entertainment, over terms of their partnership. Odeon, Advanced and Cinemedia lost 25-30% of their value, while VCL lost 24%.
Stockbrokers attribute some of the recent pain to investors shuffling their portfolios ahead of the year end, when rankings are calculated. But the latest losses only amplify the downward trend which has gripped German media stocks since mid-2000.
"There is not much upside at the moment, especially for the licence traders," said Bernd Tubeleih, Frankfurt-based media analyst with Merrill Lynch. "Leaving aside EM.TV, the 13 biggest licence traders have raised some Euros2bn through IPOs or secondary listings in the last two years. Between them they have some Euros600m-Euros700m left and we calculate that five of them are at zero."
Intertainment is now valued at only $52m after it announced that it is suing Franchise. It was worth $750m in late July. At Euros5.87, EM.TV & Merchandising, rights trader and former champion of the Neuer Markt, is down an astonishing 90% in three months.
Robert Willis, German media analyst at Societe Generale, points to a series of disappointments including the profit warnings at VCL, Intertainment and EM.TV, as well as the hollowing out of Advanced Medien.
"Obviously there is now a sector problem in the minds of investors who have looked at the carnage in the technology-media-telecoms sectors," he said. "And as the sector has shrunk in size some foreign investors have decided that it is also too small to bother with."