A month after merger talks broke down, SMG yesterday issued a stinging profits warning and admitted that it was in danger of breaching its banking covenants.
The shares tumbled 13.5p to a 15-year low of 55.5p, valuing the owner of Scotland's two television franchises and Virgin Radio at just £175.2m.
Media industry experts were taken aback at the severity of the warning and declared SMG vulnerable to potential predators.
Last month UTV, the owner of Ulster Television and TalkSport radio, walked away from merger talks after consideration of SMG's results for the first half of its year.
SMG, which has been searching for a new chief executive since Andrew Flanagan was ousted earlier this year, had been holding out for 55 per cent of the equity of a merged entity.
After first rejecting a merger of equals with its smaller rival, SMG then snubbed a revised offer of 52 per cent of the combined equity. At that time, SMG shares stood at 77p and the company dismissed UTV's offer for failing to reflect its "prospects and the value of its portfolio of assets".
Yesterday, SMG said broadcast markets had "weakened significantly" in the second half of the year. Annual profits would now be "materially" shy of City expectations.
However, SMG said it expected a "satisfactory outcome" of discussions with its bankers about possible breaches of covenants.
Its Pearl & Dean cinema advertising business, which is already up for sale, has performed particularly poorly in recent months. Ahead of yesterday's warning, analysts had expected the business to notch up losses of about £800,000 this year. Now they think losses are likely to be around £4m.Reuse content