Moviemaker Lions Gate
Unfortunately, I can no more explain why the stock is down now than I can tell you why it shot up in after-hours trading on Friday. The only thing that has changed about Lions Gate between Friday afternoon and today is that a couple of bits of good news broke. Seeking Alpha published a transcript of the company's post-earnings conference call (by the way, thanks, guys). In it, we learned that Lions Gate CEO Jon Feltheimer promised to generate "$100 million in free cash flow every year," and more specifically asserted: "We are definitely heading yet again to another year [meaning this one] over $100 [million] in free cash flow" (before warning that "it's still too early to tell you what kind of growth we might expect for next year").
Also on this call, the company -- which produced Missing for Disney
This is hardly the kind of news you'd expect to bring a stock down. Conversely, the news on Friday wasn't exactly of the sort calculated to move the stock up, either. Revenue was up 57% in comparison to last year's Q2. But costs rose even more sharply, taking a saw (pardon me) to Lions Gate's profits. Direct operating costs nearly doubled year over year, and marketing spending rose by two-thirds. Result: The company reported net, and even operating, losses for the quarter. Per share, the net loss was $0.47, even worse than expected.
And the scariest part of all? Lions Gate grew its share count by 14% over the past year. Without all those extra shares to spread the losses around, the firm's per-share loss would have been even bigger.