SFX Entertainment, which has been pursuing an aggressive $1 billion acquisition campaign in the fields of theatre, music, sports and family entertainment, saw its stock value slip 19 percent Dec. 2 after management concurred with Wall Street analysts that 1999 operating profits would be off by as much as two percent.
SFX stock was down almost six and half points to $27.50 yesterday, just above the company's 52 week low mark. The reason for the dip, SFX said, was that "New Years Eve 2000 has turned out to be somewhat disappointing to the entertainment, travel and lodging industries, creating slightly disappointing results for SFX from that one night."
While stock analysts' 1999 estimates for SFX fell approximately 2 percent below previous expectations, company management was "surprised and concerned at what it believes is an overreaction in the market place."
"SFX's management was probably closer than most in their earlier estimates of the potential for this New Year's Eve," the SFX paper said. "Fortunately, with the result that the company has not participated in the type of blockbuster events which have created losses or cancellations for others in the industry."
SFX indicated that it still expected to post strong 4th quarter earnings and continued growth in the year 2000. Company management and stock analysts seemed to concur that the Dec. 2 SFX stock event reflected short-term problems connected with New Year's Eve bookings rather than deeper issues affecting the company's core businesses.
For its part, SFX also indicated it was "in full agreement with the recent criticism of companies micro managing to precise achievement of analysts' estimates."
SFX Theatrical develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. On a broader scale, SFX Entertainment, Inc. Is an integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally. SFX has 120 venues overall, and owns or operates venues in 31 of the top 50 domestic markets.
-- By Murdoch McBride