ViacomCBS Inc. is an American diversified multinational mass media conglomerate that was formed through the 4 December 2019 merger of the second incarnation of CBS Corporation and the second incarnation of Viacom. Shares of this media company have taken a deep hit, after the reports by Bloomberg News, that ViacomCBS and Discovery are part of an unprecedented $35 billion block trades, which includes Chinese companies as well as US media conglomerates. In general, the news over the weekend of massive (about $30 bln) block trade sales by Archegos Capital last Friday due to margin calls continue to weigh on sentiment.
The ViacomCBS Inc. share price climb ended and hit bottom through Monday, after two big bloc trades linked to the forced liquidation of Archegos Capital Management sent ViacomCBS shares down from a record peak on March 22 to $45.01 Monday. Shares fell for five days in a row, by 55% overall. With the sell-off, ViacomCBS’ valuation has returned to its average level after skyrocketing earlier this year. The price-to-earnings ratio for the stock was around 10.8 on Monday, down from 23.4 in mid-March. (source: Bloomberg)
As a competitor to the streaming industry leader Netflix Inc., Amazon Prime and Walt Disney Co. ViacomCBS Inc’s move is quite heavy and its share value is considered too high. But the decline this time may be an opportunity for investors to buy back the share price that has fallen by about 55%.
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Ady Phangestu
Market Analyst – HF Educational Office – Indonesia
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