Pressure mounts on AMC Networks: CEO exits after less than three months, major layoffs coming soon
The company’s stock price dropped from $23.56 per share on March 26 to $10.63 per share on April 2, a loss of more than 85 percent. That loss in value reflects more than $80 million in costs and one-time severance benefits, or 4 cents per share, after adjusting for the impact of the company’s stock price on the company’s pretax income and other expenses.
According to the company, the most recent stock price reflects a one-time adjustment to reflect the fact that it has a new, higher, and slightly higher projected revenue than its original estimate.
The stock was up from $36.28 on September 12, 2008 to $23.56 on March 26 while the company’s annualized revenue was $3.6 billion, and its estimated pretax income was $1.3 billion.
The stock was up from $22.87 on January 26 to $36.28 on March 26 while the company’s annualized revenue was $3.6 billion, and its estimated pretax income was $1.3 billion.
In a statement to investors, AMC Networks senior vice president and chief financial officer Tom Gorton said the company had a “difficult year.”
“The timing of the decision to exit was driven by market conditions, particularly the uncertain economic environment, as we had hoped to continue to grow our top-of-line growth through organic, unannounced and controlled organic growth and cost-contraction,” he said.
“As of April 30, 2010, we did not have any additional operating cost reduction measures in place. Also, our operating loss was significantly deeper than we anticipated in December 2009. In addition to other factors, we believe the market environment in late March and early April adversely affected our stock price,” Gorton said.
The company said that it is taking steps to cut $45 million in costs by the