Australian media stocks are getting hammered in the current environment yet few strategic investors are taking the opportunity to buy.

It seems everyone is scared with even the big boys like the Murdoch and Packer families saddled with too much debt for comfort.

However, one party with money to burn is Kerry Stokes’ Seven Network Ltd which has been aggressively stalking West Australian Newspapers.

At last night’s close of $8, shares in WA News have more than halved from the peak of $16 last September. This means Seven’s $479 million investment in a 19.4% stake at $11.80 a share is now only worth $325 million. Oh dear.

Stokes can’t just sit passively on the WAN register with 40.6 million votes. Having decided not to sell out straight after the EGM humiliation in April, Seven should be back in the market buying another 3% using the creep provisions. The prohibition on buying more shares without launching a full bid expired last month.

However, spending another $50 million on 6.28 million shares lifting Seven’s stake to 22.4% wouldn’t be enough to deliver Stokes the coveted chairmanship of WAN given these results at the EGM:

Kerry Stokes: for 57.25m, against 86.15 million (net deficit 28.9m shares)

Chairman Peter Mansell: for 77.37m, against 66.06m (net surplus 11.31m)

Then again, institutional patience with the incumbent board is wearing thin as they still haven’t produced this promised new director. Eric Fraunschiel, the former Wesfarmers finance director who is up for re-election this year, could be vulnerable to a proxy campaign from Stokes at the October AGM.

One reason for Seven’s delay in moving on WAN is perhaps its own damaged reputation for punting the market with that $2.6 billion pile of cash that was sitting on the balance sheet last June courtesy of the deal with KKR.

Seven shares were sold off in February after the results presentation revealed that the net cash position had plummeted from $2.6 billion to $1.6 billion over the half, whilst $715 million had been put into unnamed stocks, in addition to the $479 million splurge on WAN.

Even Seven’s 23.5 million shares in Perth-based mining services company GRD is showing a big loss with the stock having plunge more than 70% over the past year.

The onus is now on Seven to come clean about which stocks it holds and how big the losses are from the current bear market.

Auditor Ken Reid should be pushing for a mark-to-market writedown of more than $300 million and the company shouldn’t be buying its own shares right now when the market is fundamentally uninformed.

If listed investment companies like AFIC and Argo have to release a net tangible assets figure at the end of each month, ASIC and the ASX should make Seven should do the same.

*Today’s Mayne Report video gives Chris Uhlmann and Alan Kohler a slap for their big attacks on Ross Garnaut.