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After the IT stocks hit rock bottom it‘s the turn of media stocks to do the same. Even as Zee Telefilms stocks continue to fall, Cinevista has made its debut at the most fragile time when the sentiments of the new economy stock markets are at all time low.
Cinevista opened its shares to the public in February at a price of Rs 300 per share. The markets then were all gung-ho about the new economy stocks and Cinevista‘s stocks were over subscribed 200 times. Zee was at its all time high at Rs 1630 per share. But since then the price of Zee has come down by more than half.
In keeping with the trends Cinevista also closed the day at Rs 293.35. Its stock continued to swing between Rs 136 and Rs 329 throughout the day. This despite the fact that media stocks are not as fragile as the dotcom stocks.
This, analysts say is definitely not a healthy trend. The highly debatable valuation techniques adopted by the dotcom and media companies are now being exposed with Sebi officials taking the matter in their own hands.
These trends will hopefully deter many other media companies‘ who want to jump into the IPO wave. The most anticipated media stocks which could do some rethinking are Deeraj Kumar promoted Creative Eye Ltd and Pritish Nandy‘s Pritish Nandy Communication Ltd.
