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Industry Stocks Battered in August; 'PW''s Index Off 15%
Jim Milliot -- 9/7/98
Wiley alone in making it through unscathed; August 31 meltdown only partially to blame
The August 31 stock market dive that drove the Dow Jones Industrial Average down 512 points turned an already weak month for publishing industry stocks into a horrible one, with the Publishers Weekly Stock Index falling 15.8%, compared to a 15.1% decline for the Dow. The PWSI fell 7.3% on August 31 alone, compared to a 6.3% drop for the Dow.

During August, only one of the 24 stocks tracked by PW managed to post a gain-John Wiley's stock price inched up 0.6%, to $58.25. The poor month, however, cannot be blamed solely on the August 31 plunge, as only one stock (in addition to Wiley) was selling at a higher price on August 30 than at the beginning of the month. Thomas Nelson's stock price was ahead 0.8% before falling 1.8% on the 31st. Moreover, between July 31 and August 30, the PWSI had already fallen 9%.

The biggest percentage loser among PWSI stocks that were selling for at least $4 per share on July 31 was Golden Books, whose stock fell 66.7% to $1.36, a price near the children's publisher's all-time low. Continuing poor results at Golden had already dropped the company's stock 64.7% before the August 31 sell-off. Other stocks that were trading at or near their 52-week lows at the end of August included Borders Group, Franklin Electronic Publishers, Reader's Digest, Books-A-Million, Millbrook Press, Crown Books and Hastings Entertainment. The poor showing of Borders' stock is the biggest surprise among the PWSI stocks; the bookstore chain's stock price fell nearly 40% in August, despite decent second-quarter results.

With the steady decline in its stock, BAM took the opportunity to announce that its board had authorized the repurchase of up to 1.5 million shares of its outstanding stock. And Viacom's stock rebounded a bit on news that it plans to spend up to $1.75 billion to buy back shares.

Amazon.com had the largest point drop among companies on the PWSI. The Internet bookseller's stock fell by about 27 points in August. Amazon, which is becoming one of the more volatile stocks in the market, closed at $85.88 per share on September 3. Barnes &Noble, whose stock fell nearly 29% in August, said the uncertainty in the market will not delay its plans to launch an initial public offering for barnesandnoble.com some time this month.
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