Hollywood Media Ends Strategic Review; Stock Hit

Hollywood Media's stock fell by about 3% in a strong market after the company announced the end of its strategic review and a stock buy back. After struggling to reach profitability and facing investor criticism that the small-cap company was unfocused, Hollywood Media announced a strategic review earlier this year that was widely expected to lead to the sale of some of its businesses. Subsequently, the company announced the sale of its Cinema Source listings business for $23 million on August 27th, and stated then that it would "continue to consider additional potential opportunities" for its other businesses, namely: theater ticketing businesses Broadway.com, 1-800-Broadway, Theatre Direct International, and London-based Theatre.com; Internet movie info sites Hollywood.com and U.K.-based CinemasOnline; free VOD cable TV network Hollywood.com Television; and a 26% minority stake in MovieTickets.com. The announcement of the termination of the review signaled the failure to sell further businesses on attractive terms. Instead, the company stated that, with $35.5 million of cash on its balance sheet and no debt, it would spend up to $10 million to repurchase stock. At a stock price of $3.43, the company has a market cap of $116 million and an enterprise value of about $80 million.

Sources: Hollywood Media Corp. Announces Share Repurchase Program
Impacted stocks: HOLL

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Comments

[David Jackson:]

One quick comment on HOLL's enterprise value of $80 million. In April, Fandango was purchased by Comcast for a reported $200 million. (See: www.techcrunch.com/200... ). Movietickets.com is probably worth more than Fandango, as it has bigger foreign operations and better distribution.

So HOLL's 26% stake in Movietickets.com may be worth over $50 million.

Then the question is: how much are the other businesses worth?

Full disclosure: I'm long HOLL, and have been for (literally) years.

2007 Oct 01 04:17 PM

[David Jackson:]

One other thing: being long HOLL for years has been really painful...

2007 Oct 01 04:26 PM