What Happened?
Shares of broadcasting and digital media company TEGNA (NYSE: TGNA) jumped 29.2% in the morning session after reports that rival broadcaster Nexstar Media Group is in advanced talks to acquire the company. This potential acquisition comes as the U.S. television broadcasting industry grapples with challenges from shifting consumer habits and increased competition for advertising dollars. The deal would unite Nexstar, the largest U.S. television station owner, with Tegna's 64 stations, in a strategic move to gain scale. This consolidation is seen as more likely due to potential deregulation at the Federal Communications Commission (FCC), which could loosen media ownership rules. The move is also indicative of a broader trend in the sector, as other broadcasters engage in acquisitions to operate more effectively in the current economic climate.
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What Is The Market Telling Us
TEGNA’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for TEGNA and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 19 days ago when the stock gained 3.4% on the news that the United States and Japan reached a new trade agreement. The television broadcasting company's stock rose in the absence of any specific company news or press releases. Instead, the upward move appeared tied to positive sentiment across the wider market. Investor optimism was fueled by the announcement of a new trade deal between the U.S. and Japan, which spurred a rally across major U.S. equity indexes, including the S&P 500 and the Dow Jones Industrial Average. This favorable macroeconomic backdrop often lifts individual stocks as overall market risk appetite increases.
TEGNA is up 6.3% since the beginning of the year, and at $19.97 per share, has set a new 52-week high. Investors who bought $1,000 worth of TEGNA’s shares 5 years ago would now be looking at an investment worth $1,614.
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