Comscore stock down 85 percent since resignation of CEO and cash infusion from Cayman Islands fund
Comscore, its stock already approaching all-time lows, missed expectations of flat revenue with a 4.4 percent decline last quarter. The media measurement company’s interim CEO said on a Tuesday earnings call after market close that it’s “exploring all strategic options.”
The stock already has fallen 85 percent since CEO Bryan Wiener and President Sarah Hofstetter abruptly resigned at the end of March in a dispute with the board, shedding more than $1.2 billion in market capitalization. About $300 million of that slide has come since the company announced a deal by which it got a $20 million cash infusion from Cayman Islands-based fund CVI Investments, which could ultimately give that fund a 20 percent stake in the company.
On Tuesday’s call, Comscore executives explained the need for that deal: to meet stepped-up requirements for $40 million in cash on hand under a prior financing arrangement amid a cash drain last quarter.
In response to analyst questions on whether Comscore would consider selling its growing and market-dominant movie box office measurement business or its declining syndicated digital audience measurement business, interim CEO Dale Fuller said, “We are exploring all strategic options.” He added that investment bank Goldman Sachs, which helped handle the CVI investment, continues to work with Comscore on other matters.
Comscore has been subject to considerable takeover speculation since Wiener and Hofstetter left – albeit not enough to lift a steadily declining stock price. The company, or its pieces, go on the block at a time when major players in the industry are changing hands or up for sale, with WPP having recently agreed to sell its controlling stake in Kantar to private-equity firm Bain Capital and Nielsen reportedly negotiating a sale with private-equity firms.
Fuller also said Comscore’s search for a permanent CEO continues and is a “high priority” for the board. He appeared to take himself out of the running for that, noting: “I’ve been here now five months. I look forward to getting back to retirement.”
Comscore, which provides marketing data and analytics to media and advertising agencies as well as publishers and other enterprises, has indeed had a rough run on his watch—and things don’t appear likely to get much better soon. Fuller and Chief Financial Officer Greg Fink projected revenue will remain flat on a “sequential basis” compared to last quarter for the balance of the year, then be “flat to slightly higher next year.”
Comscore has yet to find a way to stem decline of its original and still biggest piece—digital audience measurement. But revenue increased last quarter in TV and cross-platform measurement, movie reporting and analytics, local TV, addressable advertising targeting and over-the-top, or streaming internet video, products. In OTT, Comscore has secured a measurement relationship with AT&T’s Xandr in what Fuller said is likely to become a three-firm market. But none of that offset declines in the digital audience business or analytics and optimization custom sales.
Due in part to the declines in market capitalization and revenue, Comscore took a non-cash impairment charge of $241.6 million at quarter’s end. It also booked a $5 million liability related to an ongoing Securities and Exchange Commission investigation dating to 2015, all of which helped push its quarterly loss to $279.5 million, compared to a $56 million loss in the year-ago quarter.