Yellow Media group has become the paragon of a traditional print business failing to transition into today's digital landscape. After the Canadian company reported a $2.9 billion quarterly loss, shares sunk a steep 40%. Now worth between six and seven cents, analysts have lowered their share price targets to as little as a single penny, suggesting that Yellow Media isn't just at death's door—it's already opened it.
The nearly $3 billion in losses is quite the burden for a comany whose market value is barely $70 million. Once famous for its iconic yellow-paged telephone directory, Yellow Media has been unable to stem the bleeding from its print side and has largely failed to sieze the opportunities that lie in operating a digital business.
"The acceleration of the decline in revenue this quarter compared with the fourth quarter is going to continue, given it was caused by both a reduction in online growth and an increase in the pace of decline of print revenue," analyst Maher Yaghi of Desjardins Securities told Reuters.
"We did expect the digital revenue growth to slow down ... but we did not think it would go from what was 20 percent in the fourth quarter of last year to 7.8 percent now," Standard & Poor's credit analyst Madhav Hari told Reuters. "There is a heightened risk of a restructure of this company in a not-so-distant future."