Following Monday’s downgrade by stockbroker Merrill Lynch of audience prospects for the ITV network [WAMN: 27-Sep-00], investor jitters have driven down the share price of ITV’s largest shareholder, Granada Media. Yesterday this reached its lowest level since the broadcaster’s IPO in July when shares floated at 515p, rising to a high last week of 573p. Since Monday this has plummeted by 135p, closing yesterday at 438p.

Merrill's investor report pontificated that ITV’s fourth quarter revenue performance “appears to be getting weaker” and that ad income for October could be down by 17%. The Thundering Herd’s crystal ball also predicted that ITV’s total ad income will fall to £1.94 billion for the current year, as opposed to the £2.01bn it previously foresaw.

Granada responded to the Merrill prophesy with the early release of its year end trading statement, reporting “unprecedented [first half] growth of 11%”, and reverting to a “more normal level of 6%” in the second half. The bewildered broadcaster claims it cannot understand the ferocious about-face in sentiment toward its stock, branding this a "huge overreaction".

News source: Financial Times