At the close of November 7, Televisa shares in the Mexican stock market fell 44.73 percent cumulatively so far this year. Its shares ended at 2.52 pesos, still trading very close to their historical lows.
If we measure the annual balance of the same securities, the fall is 52.36 percent, it is a true collapse of the shares of one of the most important and influential companies in the country and a business icon in Latin America.
With the fall of Televisa shares, its market capitalization value also falls: This indicator has decreased by 25 thousand 99 million pesos during the current year, from 49 thousand 639 million at the end of 2022 up to 24 thousand 539 million today.
While the financial markets closely follow the evolution of interest rates and their probable effects on the global economy, corporations face the difficulties of this and other factors, in addition to the fierce competition in the sector in which Televisa and the gradual change in the business model that has generated the emergence of factors such as streaming.
Heavy losses, a trigger
The cause, or one of the causes, of the historic fall in Televisa shares is the series of losses it has reported in recent months.
For example, the group reported that between July and September last recorded losses of 1,051.6 million pesoswhich contrasts notably with the profits recorded in the same period last year, when it obtained profits of 1,302.7 million pesos.
Its income had an interannual decrease of 4.9 percent in the third quarter of the year, totaling 18 thousand 315.7 million pesos.
Televisa noted that this decrease was driven by the 13.8 percent drop in revenue recorded at Sky and 24.0 percent less in business operations at Cable, which did not manage to offset the 1.8 percent growth recorded in operating income at Cable’s mass market, as well as the 2.2 percent recorded in other businesses.
The outlook is complicated for the television station and the market knows it and is beginning to discount it. Citi Research recently cut its target price, which threatens to take the company’s share price below its historical minimum price of 2.18 pesos per action.
Competition, another great impact
Televisa faces tough competition; It is not new, but it is still important because one more is added to the competition it has always faced.
This is how the largest producer of audiovisual content in Spanish has faced extensive competition with paid content generators for several years; This competition intensified during the Covid-19 pandemic, as video streaming platforms such as Netflix, Disney+, HBO Max, Amazon Prime and others displaced the company from this market, relegating it and impacting its income in the long term, something that affects it to this day.
For some experts in the company, it is evident that advertising, content, audience and viewing of traditional television is falling, the big winners are the online platforms and the great impact is, of course, for traditional television stations, highlighting the one that records the largest and most important of them in Latin America, although it is certainly not the only one.
Hence the relevance of what happens with the actions of this television station, it is clear that the changes in business models are already reflected in the company’s numbers.
For example, in Citi’s estimate to lower its target price, it considered that the television station’s cable and broadband unit, Izzi, could be heading towards another weak quarter, pressured by improvements in its competitors Megacable and Telmex, translated into eventual cuts. Of customers.
Likewise, this rating agency, Citi Research, predicted around 30,000 organic net disconnections at Izzi, in addition to a similar rate of declines at the Sky cable television unit. Without a doubt, very bad news for the television station, which if it materializes in the coming months, will deepen the crisis in which this sector finds itself.
That is the relevance of what is happening with Televisa, its numbers are a true reflection of a change in business model that even analysts have classified as “in real time”, and therefore it is not known how far it will go, or when it will end. .
MORE NEWS: