Mounting concerns about the loss of both two top executives and an equity stake in terrestrial digital TV sent shares in pay-television giant BSkyB diving further on Monday and analysts forecasts more weakness to come. 
Around 1.7 billion pounds ($2.8 billion) has been wiped off the value of British Sky Broadcasting since last week and some analysts said the shares, which fell 14.5p to 483p in afternoon trade, could tumble to 350p.  News Corp Ltd is the largest shareholder in BSkyB.
"There has quite clearly been a re-rating in the last week and I think it's going to continue," said Jason Crisp, media analyst at brokers SocGen. 
Another broker said only in "wildly optimistic" cases could the shares be valued even at 450p. 
Negative weekend newspaper reports helped compound last week's share falls sparked by a report in the Financial Times that BSkyB could be shut out of the bidding for new digital TV licences, experts said. 
The Financial Times reported last week the television watchdog, the Independent Television Commission, had told BSkyB it should drop its one-third stake in a consortium with commercial TV groups Carlton Communications and Granada Group. 
BSkyB was enjoying an effective monopoly on pay- television and the watchdog was concerned about market domination, the FT said. 
The report, which remains unconfirmed, followed last week's announcement that BSkyB's respected chief executive Sam Chisolm was stepping down and deputy managing director David Chance was becoming a consultant. 
SocGen's Crisp said the stock, which had hit an intraday 1997 high of 669p on February 14, had been vastly over-rated and should be trading nearer 400p. 
He noted apart from the possible loss of its equity stake in its digital terrestrial TV consortium, called British Digital Broadcasting, and the loss of two very talented and experienced staff, flat satellite dish sales and rising operating costs were hitting the shares. 
"All these things make you think it should be on a more typical PE (price earnings ratio) multiple of other big media companies," he added. 
At 400p, the stock would have a more reasonable PE of 22 times next year, compared to one nearer 30 times before the share correction, Tysoe said. 
Credit Suisse First Boston was even more negative. " We'd just re-iterate from our call last week that fundamental value on BSkyB is about 450p even in wildly optimistic cases, about 350-400p in more reasoned scenarios," it stated in a note. 
But Mike Woodcock, media analyst at Nikko, said the share price fall had been overdone and he would recommend buying the shares under five pounds. 
He said that in the short-term, the news on BDB, a business he valued at around 400 million pounds, was positive from a financial point of view. 
Compensation is tipped by the Financial Times at 75 million pounds.  BSkyB can also keep some 100 million pounds which it was going to invest in the joint venture. 
"Is the news of BDB and Sam Chisolm stepping down enough to warrant 1.7 billion pounds being wiped from the value of BSkyB?  I would say no," Woodcock said. " The real benefits for BSkyB are in the provision of programming rather than in the equity stake." 
But he said as traditionally high operating margins were squeezed -- partly because payments to show English Premier League soccer are set to rise to 160 million pounds per year from August -- he was expecting flat pre-tax profits of 309 million pounds in 1998 and 1997. 
Other longer-term concerns, he said, were about how independent BSkyB was from media tycoon Rupert Murdoch's News Corp Ltd, its leading shareholder -- and how much News Corp would benefit from the success of the pay-television giant. 
The ITC hopes to decide by the end of this month on whether to award digital terrestrial television licences to BDB or a rival consortium run by cable and broadcast group NTL Inc.
