[dropcap]T[/dropcap]he Nation Media Group (NMG) share price plunged on Tuesday in the wake of jitters sparked by a massive restructuring programme currently under way at Nation Centre, wiping off millions of investors funds in a space of less than two weeks.
At one time in that 10 days, during trading at the Nairobi Securities Exchange (NSE) the share was touched a low of Ksh101 before settling at Ksh 103, three shilling lower that the previous day’s price.
The NMG share price has been on a downwards spiral since January 14, when it was selling at an average of Ksh114, a pointer to anxiety among shareholders over the financial health of Kenya’s largest media house, which is seeking to offload 140 staffers and put others on contract to trim its wage bill. According to Reuters analysis, the share has hit a high of Ksh125 in last one year and a low of Ksh73 during the same period.
The company’s half year profit to June last year rose by a paltry 2.3%, recording Ksh 1.17 billion earnings before tax and full year results are believed to have taken a major hit from last year’s political jitters.
READ: Joe Muganda: Former beer seller leaves NMG high and dry
Reports from Nation Centre indicate the company is unable to fully compensate senior managers targeted for retrenchment and is instead offering them a golden handshake, which they have waved off.
At Thursday’s trading, 295,700 shares were offloaded with the turnover standing at Ksh30.76 million. The share price tried to crawl back into a bigger positive terrain hitting a high Ksh 105 at some point.
Similarly, the share price of the Standard Group, the other listed media house, has been wavering in recent weeks dropping from a high of Ksh37 on January 3 to Ksh 28.25 on Wednesday before regaining to close at Ksh29.50 at Thursday’s trading.
The company last year issued a profit warning, saying its earnings were likely to drop by at least 25% in year to December 2017 compared to a similar period in 2016 due to a tough third quarter that was marred by a political environment that affected both ad revenue and print sales.
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The media house also recently undertook a staff rationalisation exercise. Investors have also lost interest in media stocks due to reduced advertising revenue as a result of competition from digital platforms such as Google, Facebook and online news outlets.
At the same time, the shock resignations of NMG and Standard Group CEOs, Joe Muganda and Sam Shollei respectively, last year are believed to have affected investor confidence.
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