Excluding the online bookseller, the PW index was still up 33%, handily beating the Dow gain
Despite the perception by some that book publishing is a financial backwater, the Publishers Weekly Stock Index rose 116.6% in 1998, compared to a 16.1% gain for the Dow Jones Industrial Average. The gain in the PWSI was led by Amazon. com, whose stock rose a spectacular 966% in the year and closed 1998, after a two-for-one stock split, at $321.25. Amazon implemented a three-for-one stock split January 4, 1999.
Even excluding Amazon, the PWSI increased a healthy 33% last year, led by strong performances by Time Warner and John Wiley &Sons, whose stocks both had a stock split in the year, as well as Viacom, whose stock price increased 80%. Books-A-Million, still viewed by some investors as an Internet stock, finished the year at $13 per share, after its stock price climbed to as high as $47 from a 52-week low of $2.25.
Scholastic, after seeing its stock price fall 44% in 1997, rebounded nicely in 1998, finishing the year with a 43% gain. The McGraw-Hill Cos.'s stock price rose more than $27 in 1998 and joined Amazon.com as the only company whose stock was selling at more than $100 per share.
The biggest loser in the year was Golden Books, whose stock fell 97%, closing at 31 cents at the end of 1998, as investors became increasingly skeptical that the children's book publisher can be turned around. Crown Books, which is currently in Chapter 11, recorded a 93% drop in its stock price and was selling at 41 cents per share when it was delisted on September 18. The Borders Group strategy to expand internationally did not impress Wall Street in 1998, as the nation's second largest bookstore chain saw its stock price fall 20% in the year.
During the past year, two companies disappeared from the PWSI; both Plenum and Waverly were acquired by Wolters Kluwer. Two companies added to the list were IDG Books and Hastings Entertainment, both of which went public in the year.
