HMV shares bounced back after chief executive Simon Fox pulled out of the race for the top job at embattled broadcaster ITV.
The entertainment group’s shares took a knock last week as news spread that Fox was frontrunner for the broadcasting role and Morgan Stanley issued a note raising questions about the sustainability of HMV’s success in the face of emerging digital formats. The broker also said that 2009/10 would bring HMV’s earnings peak
But shares rose again this week when Fox, lauded for achieving a turnaround at the entertainment retailer, told the HMV board he would stay on to see through his three-year revival plan.
HSBC analyst Paul Smiddy also helped bolster sentiment when he upgraded the retailer from neutral to buy. He said the shares are “too cheap” and said “the autumn release schedule looks positive”.