Company Assignment: Seven West Media

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Table of Contents

Market Value of the Company Shares
Reference List

Market Value of the Company Shares

Market value is considered to be the price at which it is possible to buy and sell the assets of the company (Mayes & Shank 2009). Seven West Media’s market value as well as its share price is not always stable: its last sale price is about $2, 840 that is -1,05% of the current value (Australian Securities Exchange 2011).

Market share of the Seven Media Group is about 38% nowadays and thought its concentration is in rather a volatile state because the majority of networks take risks when they decide to devaluate advertising air time (Sallmann 2011). In general, the position of market value of Seven West Media’s shares is not stable, and it is hard to predict what kind of change may be observed tomorrow. However, the ability to cooperate with the investors on different levels introduces good prospects in the nearest future.

Reasons of Share Price Movement

According to the first annual report of the company (Seven West Media Annual Report 2011), the current company’s share price is up to 50% in comparison to the numbers got in April of this year. Such share price movement may be based on the challenges the company faced recently.

The point is that Kerry Stokes, the chairman of the company, has successfully coped a hammering that came from the investors, who were not satisfied with the idea that West Australian Newspapers offered $4,1 billion acquisition (Ahmed 2011).

21 February 2011 was the time when West Australia purchased Seven West Media and made it one of the biggest media companies in the country. Its share price decreased up to 37% at that moment, and there was a need to take some changes and improve the situation. The main reason why the share price of the company underwent certain changes was shareholders’ uncertainty that Seven West Media could not benefit from cooperation with such huge company like West Australian newspaper.

The period between May and August in 2011 was not the most successful for the company as well, and, the charts show how the situation changed during that period (Figure 1). It was hard for Seven West Media to find good investors after the company was purchased.

Figure 1. Seven West Media Share Price Compration

The impact of the West Australian was an integral point, and not many companies were eager to pay attention to the offers of the company as they were not sure about the continuation of such cooperation, this is why the share price was not stable and decreased gradually.

Summer 2011 was a difficult period for many media companies due to weak advertising, still, Seven West Media followed its share price too closely. The attempts were justified for a while. In September, its share price was increased up to 10%, and in October its falls again because of the company’s decision to refinance its debts with the help of several commitments from banks.

Market Capitalization

It is very important for the companies, which are listed in ASX, to multiply their share prices according to the number of shares in one particular issue.

This ability of Seven West Media that improves the current market values is also known as market capitalization. When the company was added to the West Australian Group, market capitalization of SWM was about $3,5 billion (Lower & Koons 2011); it made this company one of the largest in Australia and the most attractive for shareholders.

Nowadays, this company takes the third place with market capitalization of $1,7 billion (Seven West Media 2011). The dividend reinvestment plan and the purposes set by the company prove that the company has a lot to say, this is why it is necessary to expect crucial changes in the numbers available at the moment.

Competitiveness in the Market

Competitiveness is one of the crucial concepts in any company as it defines the possibility to perform and sell services under the conditions appropriate for the market. It is vital for Seven West Media to ensure both domestic and international competitiveness in order to achieve success in the media industry. The company should prove that it is able to define its main competitors in time and take the necessary activities to overcome them successfully.

Domestic Competitiveness

Domestic competitiveness should determine the positions of the company by means of services and sources determination. Francis (2011) admits that one of the latest attempts to conquer the competitors at the domestic market it the announcement that certain innovations at AFL television broadcasting will be done during 2012-2016.

This decision may increase the chances of the company to attract more consumers of their services and overcome such companies in the domestic market like Pacific Magazines, Sky News Australia, and other companies, where Seven Media Group is regarded as the main shareholder.

It is also necessary to take into consideration the fact that Seven West Media is engaged in such spheres like radio broadcasting, newspaper publishing, and commercial printing (Corporate Information 2011), this is why it is very important for the company to analyse any possible Internet technology innovations in order to make use of them earlier than other companies can do it.

International Competitiveness

International competitiveness of Seven West Media differs from domestic competitiveness considerably. The company is well-recognized in Australia, still, its international ratings are that high. In comparison to such world leaders like the New York Times Company or the Tribune Company, Seven West Media is not that popular. Still, the above-mentioned companies are at the market for about a century, and Seven West Media is a young company.

This is why it has all chances to achieve worldwide recognition if the same tempo and ideas will be applied. In general, Seven West Media is the company that has already proved that it is possible for a single company to find appropriate investor support and taking leading positions at the domestic market. Now, its goal is to make its position at the domestic market more stable and spread its ideas and services worldwide.

Reference List

Ahmed, N., 2011. Lawyers feast on carcass of Centro Properties Group, The Australian. Web.

Australian Securities Exchange, 2011. Seven West Media Limited (SWM). Web.

Francis, S. 2011. Statement from Seven West Media on AFL television rights, Seven West Media. Web.

Lower, G. & Koons, C. 2011. West Australian to Buy Seven Media, Market Watch. Web.

Mayes, T. R. & Shank, T. M., 2009. Financial analysis with Microsoft Excel 2007. Mason: Cengage Learning.

Sallmann, N., 2011. Free to air television services in Australia: Market research report, IBIS Word Industry Report P9123. Web.

Seven West Media, 2011. Buy Sell Signals Report. Web.

Seven West Media Annual Report, 2011. Web.

Seven West Media Ltd: Company snapshot, 2011. Corporate Information. Web.

Seven West Media’s share price relative to ASX200 industrials since 2010, 2011. The Australian. Web.

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