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SANTA MONICA, Calif. - The Supreme Court of British Columbia has issued an order that approves the division of Lions Gate Entertainment Corp.’s Studio and STARZ businesses into two distinct, publicly-traded companies. The completion of this separation is expected on Tuesday, with Lionsgate Studios, currently valued at $2.06 billion, set to commence trading on the New York Stock Exchange under the ticker symbol LION starting Wednesday.
Lionsgate Studios, known for its diverse motion picture and television production and distribution operations, boasts a robust portfolio of brands and franchises. The company, which generated $3 billion in revenue over the last twelve months with a 32% gross profit margin, maintains a significant film and television library, comprising over 20,000 titles. This move positions Lionsgate Studios as a leading standalone content company in the industry.
Lionsgate currently holds approximately 87% of the outstanding shares of Lionsgate Studios. The company is also the owner of STARZ, a premium subscription platform. According to InvestingPro analysis, analysts maintain a Buy consensus on the stock, with price targets ranging from $8.50 to $15, though the company operates with significant debt obligations. The separation into two independent entities is anticipated to allow each business to focus on its core strengths and provide tailored value to shareholders.
The upcoming trading of Lionsgate Studios on the New York Stock Exchange under the new ticker symbol marks a significant shift in the company’s structure. The decision by the Supreme Court of British Columbia enables the formal split, with the financial markets awaiting the independent operations of the two companies.
This strategic move comes at a time when the entertainment industry is experiencing rapid evolution, with companies seeking to optimize their business models in response to changing consumer demands and the competitive landscape. The separation is expected to afford both Lionsgate Studios and STARZ the flexibility to pursue their respective business goals and growth strategies.
Investors and industry watchers will be observing the performance of the two companies post-separation, as they navigate the dynamic entertainment sector as standalone entities. The information regarding the separation is based on a press release statement from Lionsgate.
In other recent news, Lionsgate Studios Corp. reported impressive financial results for Q4 2024, surpassing analyst expectations with an adjusted earnings per share (EPS) of $0.28, well above the projected $0.07. The company’s revenue also exceeded forecasts, reaching $970.5 million compared to the anticipated $753 million. In a significant corporate move, Lionsgate shareholders have approved a strategic plan to split its film and television studio from its Starz network, aiming to streamline operations and adapt to the shift towards streaming services. Additionally, Lionsgate has expanded its credit facility to $1 billion, enhancing its financial flexibility for future projects. The company has also received a notice from Nasdaq regarding non-compliance with annual meeting requirements, with plans to rectify the situation by mid-2025. Furthermore, Lionsgate Studios shareholders have approved a corporate reorganization plan, which includes the creation of a new entity, New Lionsgate, and changes to shareholder rights. These recent developments highlight Lionsgate’s efforts to strengthen its financial position and adapt to the evolving media landscape.
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