Sky Network Television Ltd [NZX:SKT] has fallen 3.11% in trading today, from $2.24 to $2.15 at time of writing.
Sky is New Zealand’s largest paid cable TV provider, with over 760,000 subscribers and a market cap of $848.32 million.
Why has the SKT share price fallen?
Sky wrote down its value by $360 million at the end of its financial year, 24 August. This triggered a sharp decline, from $2.65 on 23 August to $2.15 by 31 August.
Since then the share price has bounced twice, possibly on the back of bargain hunters snapping up shares as they hit record lows. Neither bounce was able to reach $2.30, however, much less the $2.60 levels the stock enjoyed last month.
Online streaming TV services are now used by approximately one quarter of Kiwis. That’s phenomenal uptake, after first reaching our shores in 2014. Fears for Sky Network Television’s place in a changing market could be part of the slow decline that the share price has endured, from its all-time high of $6.92 on 25 July 2014.
Where could Sky Network Television shares go from here?
Sky Network Television’s 2018 Annual Report focused heavily on technology and innovation, looking at a number of recent and planned new ways for subscribers to access content. On demand streaming and movie rental through the internet and a range of apps for more viewing options may all serve to help Sky keep up with newer, streaming-based services.
However, little can change the fact that Sky is now facing stiff competition, in a market that it dominated almost entirely just a few short years ago.
Sky’s dominance of sports broadcasting in New Zealand is perhaps its greatest strength. Licences to broadcast live sport remain impenetrable for streaming services, here as in much of the rest of the world. As long as they can hold on to that, there may be some potential left in Sky Network Television. However, the stock’s trend has been steadily down for some time. Unless something changes to reverse that, bargain hunters should remain cautious.
Editor, Money Morning New Zealand
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