Since deciding to go it alone and build out its digital offerings, Time Inc’s stock has been in a perpetual slide. Despite this fact, CEO Rich Battista has continued to paint an optimistic picture of the company and its future, all while revenue continues to slide and the stock price has fallen under $11 (at the time of this post). Hey the guy is the CEO and it is his job to keep investors motivated. The company’s market cap is close to falling under $1 billion which is far from the nearly $2 billion market cap when Edgar Bronfman Jr offered $18 a share to buy the company. Bronfman’s offer was an 18 percent premium over its then closing stock price and and 34 cents over the company’s 52 week high of $17.66 at the time. Since Bronfman’s offer Time Inc’s stock price has collapsed 38 percent which has some investors concerned and unconvinced that the decision to reject Bronfman’s offer was the right one. One investor called out CEO Rich Battista during the company’s earnings call about his optimism even as the stock continues to sink. Leon Cooperman of Omega Advisors which owns millions of Time Inc shares said:
“You express an optimistic tone. And yet the stock is at historic lows.”
Perhaps the fear is that Time Inc may be forced to sell for far less after rejecting Bronfman’s offer which obviously wouldn’t be good for investors. But Mr. Battista remained optimistic in his response saying :
“As we switch to more of these non-magazine revenues and they become a more pronounced part of our overall portfolio, we think we are going to start getting real credit for the value those revenues deserve in the marketplace.”
Mr. Battista said that the company is projected to do $1 billion in non magazine revenue this year. This may be so, but the company continues to lose market cap at a steady pace. Who would’ve thought that a giant like Time Inc would be worth less than Buzzfeed and Vice media which are valued at $1.7 billion and $6 billion respectively. In all fairness to Mr. Battista he has only been at the helm for just over a year, and clearly wants time to work his strategy to see where the company comes out on the other end. Investors seem to be giving him the room to execute in hopes that he can change the current trajectory.
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