Versant is off to a rocky start on first day of trading after spinoff from Comcast

By Lukas I. Alpert Shares of the new parent company of CNBC, MS NOW and USA Network fell by close to 15% in the first few hours of trading as investors moved to adjust their portfolios following the companies' split CNBC is among the cable properties that have been spun off into a new company, Versant Media Group, whose stock began trading for the first time on Monday. The early ratings for Versant are in - with shares of the new owner of cable television stalwarts like CNBC, USA Network and the recently rebranded MS NOW (formerly MSNBC) tumbling nearly 15% on their first day of trading. Versant Media Group Inc. (VSNTV) faces big challenges as it seeks to build a successful business out of the bundle of declining cable television assets that were carved out of its former corporate parent, Comcast Corp. (CMCSA). The new company's leadership expressed high hopes for its chances. "Today marks a defining moment as Versant becomes an independent, publicly traded media company," Chief Executive Mark Lazarus said Monday. "As a standalone company, we enter the market with the scale, strategy and leadership to grow and evolve our business model." But investors appeared skeptical out of the gate, with shares falling at the opening bell and continuing their downward slide into midday trading. Comcast shareholders received one share of Versant for every 25 cents' worth of Comcast stock they held before the companies officially split at 11:59 p.m. on Friday. Comcast shares were up around 3.5% in midday trading on Monday. It's not unheard of for a newly spun-off media company to experience a selloff at the start as some investors seek to rebalance their portfolios to reduce excess exposure to two similarly constituted businesses. In 2015, shares of newspaper company USA Today Co. (TDAY) - which was then called Gannett Co. - fell 6% on the first day of trading after the company was spun off from local television station operator Tegna Inc. (TGNA). Conversely, shares of Starz Entertainment Corp. (STRZ) rose 40% on that company's first day of trading in May after it was spun off from Lionsgate Studios Corp. (LION), which fell 4.4% that same day. Media analysts say the key is whether such a separation is truly a spinoff of a company that is able to stand on its own, or more of a cast-off of unwanted assets. Versant said ahead of the split that its properties, which also include the Golf Channel, SyFy, Oxygen and E!, generated about $7 billion in annual revenue on their own. Executives there have argued that the new structure will help the company make more meaningful investments in its future, as money will no longer need to be diverted toward Comcast's theme parks or NBCUniversal's Peacock streaming service. -Lukas I. Alpert This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 01-05-26 1247ET