Why Time Inc. Stock Plunged 21% in April

By Joe Tenebruso Markets Fool.com

What

Continue Reading Below

Shares ofTime Inc.(NYSE: TIME)fell 21.4% last month, according to data provided byS&P Global Market Intelligence.

So what

The magazine publisher's stock price nosedived at the end of April when it said that it does not plan to sell itself. The company had long been rumored to be a takeover target, most notably by a consortium of private investors led by former Time Warner Music Chairman Edgar Bronfman Jr., who reportedly tried to buy Time on more than one occasion.

Yet despite those buyout offers, as well as reported pressure by activist investor Jana Partners to pursue a sale, Time has decided to remain independent.

In an April 28 press release explaining the board's decision, lead independent director John Fahey said:

Continue Reading Below

Time Inc. is one of the world's leading multi-platform media companies, engaging over 170 million US consumers across digital and print every month through a portfolio of premium, iconic brands. We strongly believe in the future and potential of this Company. The Board has full confidence in Time Inc. President and CEO Rich Battista and the management team to execute on the strategic plan.

That plan includes expanding Time's digital business, diversifying revenue streams, cost cuts, and "selective portfolio rationalization."

Image source: Getty Images.

Now what

Time's troubles have continued into May, with the stock down another 15% after the company announced brutal first-quarter results along with a 75% cut to its dividend.

Moreover, in a sign that there may be some turmoil among its leadership team, Time said that Executive Chairman Joe Ripp was resigning.

All told, with its core operations struggling, upheaval in its management, and ad industry trends increasingly moving away from magazine publishers in favor of digital platforms, investors may be best served by steering clear of Time's stock.

10 stocks we like better than Time
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Time wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 1, 2017

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.