Oh, Playboy (NYSE: PLA)! The news just keeps getting worse. I was checking out the stock quote this morning and saw that the sexy company's shares (by "sexy company" I refer to the fact that Playboy makes its money off naked women, I do not mean to imply that this is an awesome growth situation, as if you needed to be reminded, right?) are down to $1.75. Can that be right? I'm afraid it is. I then had to check the news to see what awful catalyst reared its ugly head this time. I found one that was posted earlier in the week at paidcontent.org. It looks like Playboy is going to be riddled with charges in the third quarter and will be ditching 80 jobs. It'll generate a net loss in Q3. And one final thing: it's getting out of the DVD business.
Say what? Are you kidding? The article also displayed a memo from CEO Christie Hefner. She basically tries to spin the exit from the DVD business as some sort of smart strategic move. Heck, it looks to me more like a move that she had no choice but to make to save money. I understand her thoughts about shifting to digital distribution, but come on, if the company can't make it in the home-video arena, then there's something really, really wrong with the business. The brand's power is being destroyed by all the competitive forces in the adult space. X-rated content is everywhere on the internet, amateurs can start up their own websites pretty easily, and clips can be posted and accessed on YouTube at a moment's notice. These are trying times for Playboy, and the CEO needs to realize that aggressive action must be taken to improve the brand equity of the Bunny.
It's being reported that Playboy's (NYSE: PLA) Hugh Hefner's relationship with Holly Madison is over. Madison, as you probably know, was Hefner's head girlfriend, but he has two others as well: Kendra Wilkinson and Bridget Marquadt. The four of them star in a reality show called The Girls Next Door, which runs on the E! channel. It's a pretty fun show, although it does make me maddeningly envious of Hef's lifestyle. That aside, it seems to be a decent brand ambassador for the Playboy image. Unfortunately, the popularity of the show hasn't been enough to offset losses at the media company. Playboy's stock currently sits below $3 a share. It is the exact opposite of one of Hef's playmates: downright depressingly ugly.
Well, I can't really comment as to how the Hefner/Madison affair will turn out. Will she go back with him? Is this just a publicity stunt? I simply don't know. However, I would imagine that, with Playboy's stock in the dumps, a breakup might be an event that could be exploited to help out the company. Let's face it: the whole three-girlfriend thing is pretty much an orchestrated machine anyway. So, if Madison truly does feel like she's ready to move on with her career, I think Hef should clean house and get rid of the other two girls as well. Then, he could go on a search for three new girls next door (or maybe he should search for more, why stop at just three?). It could be an integrated media campaign spanning the magazine, the website, and a new reality show.
If you've recently been laid off from your six-figure job at a top Wall Street investment and haven't been able to find anything on Monster.com, your search is over: Playboy (NYSE: PLA) has you covered. The magazine is looking for models for an upcoming "Women of Wall Street" feature.
Gary Cole, Playboy's photo editor, told Reuters that "It would be more interesting to have someone who's a financial analyst." Compensation will be determined in part by how many people apply for the "positions."
The whole thing's a little cheeky, but I'm sure they'll have no shortage of applicants. No word yet on whether Playgirl will be plastering the bare torsos of Richard Fuld and Jimmy Cayne on its covers.
As a side note, Playboy really isn't in much of a position to be poking fun at the troubles of Wall Street firms. Its stock is trading at $3.22, an all-time low down from the 52-week high of $12.
I get depressed whenever I read a Playboy Enterprises (NYSE: PLA) earnings report these days (see more of today's earnings news). I mean, sex sells, right? And one has to assume that Playboy has the best brand equity when it comes to selling sex, correct? Apparently not. Playboy's situation seems to be getting worse. The magazine is no longer the cool taboo it once was, the internet is killing it, and subscriptions and newsstand sales are fading. The magazine is arguably the driving heart of the brand. Without it, things will be rough. The numbers tell the tale.
For the second quarter, revenues declined over 14% to $73.4 million. The net loss was 6 cents per share. In the year-ago period, Playboy booked a 6 cents per-share profit. According to Briefing.com, revenue estimates were missed, as were expectations for earnings. In fact, Playboy missed by 11 cents! Not sexy at all.
All of the major operating segments saw declines in their top lines. Licensing increased its operating income by 9%. Publishing, believe it or not, actually narrowed its operating loss. Neither of these two positives is worth much in the grand scheme of things.
Shares of Playboy Enterprises, Inc. (NYSE: PLA) have tanked this year, hitting a 15-year low today. Some bargain hunters are intrigued and, if you're a fan of Playboy's offering -- or a fan of selling stuff on eBay -- there just might be an arbitrage opportunity here for you:
Since October, shares of Playboy Enterprises (NYSE: PLA) have fallen from $12 per share to Friday's closing price of $4.72 per share. Since founder and patriarch Hugh Hefner's daughter Christie Hefner became CEO in 1988, the stock has actually declined.
You might think that 20 years at the helm would be enough time to demonstrate whether you can create value, but then again, you're not the boss' daughter. However, given the sorry state of this storied company, you'd think Ms. Hefner would be working hard to turn the company around, or better yet, sell it before she destroys any more value.
But again, you're not the boss's daughter. No, instead, Ms. Hefner is serving as a guest blogger for Portfolio.com. Read her posts here and here. To give you a quick sampling of her laser focus on the business, here are some snippets:
I am admittedly of the generation that still enjoys the experience of reading a paper on paper. Daily I read the Wall Street Journal, the New York Times, the Trib and the Chicago Sun-Times. . . also go to news sites for information throughout the day. . .
Take it Private! is a new series looking at one company each week that, in my opinion, has no reason for being public. To find these companies, I screen for the following:
High insider ownership
A history of solid profitability
A paltry Price/Earnings and/or Price/Cash Flow multiple, and a reasonable Price/Book ratio.
A stagnant stock price accompanied by low volume indicating a lack of interest in the stock
My purpose in highlighting these companies? This screen can be a good way to find deep value stocks, especially companies that may be attractive to a strategic buyer, private equity firm or management-led buyout at a premium to the current share price. However, this profile should not be interpreted as a recommendation to buy shares in Playboy Enterprises (NYSE: PLA).
Steven Mallas recently asked What happened to Playboy stock?, and referring to the company's tanking stock price and operational problems wrote that he'd "love to be invited for an extended stay at the Playboy mansion so that I could help solve the company's problems "
I have to admit, I completely missed this move. I usually keep tabs on Playboy (NYSE: PLA)'s stock action. Not very close tabs, truthfully, but I do check in somewhat regularly. I was shocked when I saw how low the stock had recently dropped. Back in the first week of May, when I reported on the adult-entertainment entity's earnings, the stock was trading around $7.25. As of Thursday's close, the stock was priced at $5.85 per share. The 52-week low now stands at $5.52. TheStreet.com recently cursed the stock to sell status.
That's a steep move in such a short period of time, and now I have to ask myself: Is the stock a trade? I mean, a thought that immediately came to my mind upon seeing the current share price was that the Wall Street movers and shakers may have overshot on the selling here.
But then, other thoughts came to mind such as how badly the company has been doing. Also, as Zac Bissonnette recently pointed out, pornography isn't really recession-proof at all in this age of the Internet. Seekers of adult entertainment have seen their wallets benefit from the proliferation of the clip culture as expressed by sites like YouTube and its more porn-friendly counterparts.
The conventional wisdom is that purveyors of pornography do well in soft economies. When people are unemployed and high gas prices make travel and dinners out expensive, many men choose to stay home with a good book and a pretty girl.
But that hasn't been the case lately. In this weak economy, pornography stocks have been terrible performers. Playboy (NYSE: PLA) reported lousy first quarter results, and its stock has taken a beating so far this year. Shares of New Frontier Media (NASDAQ: NOOF) are down nearly 30% today after that company reported lackluster fourth quarter and full-year results.
So what gives? Have men lost their appetite for pornography, and are now spending their free time doing crosswords and watching The Discovery Channel?
Playboy's (NYSE: PLA) shares are hovering near a 52-week low as I write this. The catalyst, you ask? The sexy company reported some dismal earnings this week. Net sales decreased 8%. The net loss came in at $0.09 per diluted share versus positive net income of $0.04 per diluted share in the previous year's quarter.
Even if you look at some of the adjustments, the Playboy story just isn't a seductive one. And according to a Reuters article, expectations were for a profit of $0.06 per share after adjustments. The net income of each Playboy operating division headed in a downward direction. And publishing, well -- that's been the saddest segment of all for a while now.
I have a question for Christie Hefner: Are you serious about turning your father's company around? Seriously. I've been giving Playboy the benefit of the doubt now for quite some time, and I'm not sure I can do that anymore. I want to, believe me; I'm a guy who has always been in love with the Playboy lifestyle. And, remember, the invitation is always open if you need me to come over to the Mansion to help you generate some new marketing strategies.
Can you believe oil put in another monster day with oil up $1.91 at $121.88 today. This morning started out looking just like March with financials way down, and commodities up. That abated toward the end of the day. An analyst prediction of $150 to $200 oil helped propel oil today. Below are today's unofficial closing prices:
The Blackstone Group L.P. (NYSE: BX) announced today $1.3 billion has been raised to invest in high quality loan assets by closing three CLOs. Blackstone pointed out that the CLOs are not an attempt to remove risky assets off balance sheets. The newly acquired GSO Capital Partners now manages 26 CLOs for a total of $14 billion. Shares actually fell 0.75% by the end of the day to $19.57.
Oh, Playboy (NYSE: PLA)! The news just keeps getting worse. I was checking out the stock quote this morning and saw that the sexy company's shares (by "sexy company" I refer to the fact that Playboy makes its money off naked women, I do not mean to imply that this is an awesome growth situation, as if you needed to be reminded, right?) are down to $1.75. Can that be right? I'm afraid it is. I then had to check the news to see what awful catalyst reared its ugly head this time. I found one that was posted earlier in the week at paidcontent.org. It looks like Playboy is going to be riddled with charges in the third quarter and will be ditching 80 jobs. It'll generate a net loss in Q3. And one final thing: it's getting out of the DVD business.
It's being 
If you've recently been laid off from your six-figure job at a top Wall Street investment and haven't been able to find anything on Monster.com, your search is over: 
Here are some highlights from this past week's 
Shares of 
Take it Private! is a new series looking at one company each week that, in my opinion, has no reason for being public. To find these companies, I screen for the following:
The conventional wisdom is that purveyors of pornography do well in soft economies. When people are unemployed and high gas prices make travel and dinners out expensive, many men choose to stay home with a good book and a pretty girl.
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