Shares of Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) and other owners of local TV stations soared today after a key ruling from the Supreme Court regarding Aereo. The court ruled that the TV start-up is in violation of copyright law because it uses antennas to give subscribers access to broadcast TV through the Internet. The vote was six to three in favor of the four major broadcasters that filed the case. Now it looks like Aereo may not have much of a future.
Local broadcaster stocks surge
Shares of Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) climbed as much as 14% today, while Sinclair Broadcast Group Inc (NASDAQ:SBGI) climbed by nearly 15% in afternoon trading. The E.W. Scripps Company (NYSE:SSP) climbed by as much as 9%, and shares of Entravision Communication (NYSE:EVC) edged upward by nearly 4%.
Aereo argued against the four broadcasting companies that ruling against it would endanger cloud computing and online video storage. However, most experts don’t believe the ruling will affect cloud computing. Aereo uses small antennas to pluck TV signals from the air and then transmit them to its subscribers, who only pay $8 per month to subscribe.
Nexstar, Sinclair benefit from volume spikes
Trading volume on all four companies surged today in the wake of the ruling. As of this writing, more than 2 million shares of Nexstar Broadcasting Group, Inc. (NASDAQ:NXST) had changed hands. The company’s average daily volume is only around 443,000. Moe than eight times as many shares of Sinclair Broadcast Group INc (NASDAQ:SBGI) than usual had already traded hands—8.5 million compared to the average daily volume of only 1.3 million.
Entravision Communication (NYSE:EVC) also saw a spike in trading volume, as more than 761,000 shares changed hands today, compared to the company’s average daily trading volume of less than 500,000 shares. As of this writing, more than 283,000 shares of The E.W. Scripps Company (NYSE:SSP) were traded today, compared to the company’s average daily volume of less than 200,000 shares.
Sinclair gets other boosts
Sinclair Broadcast Group Inc (NASDAQ:SBGI) also got a couple of other boosts that may have affected its stock price today. The Street contributor David Aferiat reports that Trade-Ideas LLC marked the company as a “barbarian at the gate.” According to the firm, a “barbarian at the gate” is a strong stock “crossing above resistance with today’s range greater than 200%.
Trade-Ideas cited a number of reasons for the designation, including a $51.4 million average dollar volume, a range of nearly 310% of the “normal price range” with a range of $3.43. Also the firm said Sinclair Broadcast Group Inc (NASDAQ:SBGI) traded above its daily resistance level with a quality of 159 days, which means the stock passed a resistance level set by the last 159 calendar days.
Today Sinclair Broadcast Group Inc (NASDAQ:SBGI) also announced a big affiliation deal with getTV. With the Sinclair deal, getTV now reaches nearly 70% of households in the U.S.