ViacomCBS stock dropped nearly 9.1% Tuesday, as investors exited positions on news that the media conglomerate will sell up to $3.45 billion in stock as part of funding streaming content. The company’s shares closed at $91.25 apiece, coming a day after ViacomCBS’ announcement of plans to raise $3 billion in a stock offering.
Everyone is a winner in the streaming wars. Legacy media companies like ViacomCBS and Discovery have been rewarded by investors for their push into streaming, while Disney’s stock is being saved by Disney+’s breakout success. Since the beginning of 2020, both ViacomCBS and Discovery’s stock have skyrocketed by more than 130% each, and Disney and Comcast have also risen by 36% and 27%, respectively, in that same timeframe.
Disney and ViacomCBS shares were buoyant in trading Monday thanks to good news that allowed ViacomCBS to buck the general downtrend for the Nasdaq index.
Twitter shares plunged by more than 10% Monday in early morning trading following the social media giant’s move to ban President Trump, reflecting fears of political retribution and financial fallout stemming from the company’s decision.
After markets opened Wednesday, Netflix’s stock increased about 3.5% to $427.77 per share, topping its previous high of $423.21 per share, set during midday trading in June 2018. If the gains hold through the end of Wednesday, Netflix will also top its previous all-time high closing price of nearly $419 per share, set in July 2018.
Sinclair Broadcast Group stock hit the stratosphere on Monday — bucking the day’s downward trend on Wall Street to gain nearly 35% to an all-time high of $60.48 — as the company’s CEO touted the company’s deal to acquire the former Fox regional sports networks.
Shares in The Walt Disney Co. hit $129.85 at the opening bell Friday, up 13%, following Thursday’s news of details on its new streaming service Disney Plus.
Sony Corp. shares climbed more than 9% on Tuesday after a Reuters report saying Third Point LLC was again raising its stake in the Japanese conglomerate stoked speculation that fund owner Daniel Loeb was preparing to agitate for more change.
Seven publicly traded station groups have registered double-digit gains year to date, and on a year-over-year basis, three stock prices have gained more than 50% — those of Scripps, Gray and Nexstar. The groups also blew the doors off of two major indices, generally outperforming both the Dow and S&P by wide margins. Kyle Evans, managing director of the technology/media practice at the Stephens Inc. financial services firm, breaks things down.
Disney shares slipped Tuesday as investors coped with newfound uncertainty about the entertainment giant’s leadership, after the unexpected resignation on Monday of the company’s No. 2 executive and heir apparent to CEO Bob Iger. Shares were down 2.3% at $96.40 midday Tuesday, the first trading day after Disney said Thomas Staggs would depart next month after 14 months as COO and likely successor to Iger, whose contract runs through June 2018.
Analysts at MoffettNathanson have reduced their target price for Netflix by $13 per share, from $98 to $85. The firm still has the stock labeled “Neutral.” Netflix stock is down 22% year-to-date in 2016, which is the opposite of its prior-year positive trajectory.
While analysts are encouraged by TV groups’ addition of retrans as a revenue stream, their strong political revenue and a return of the deal market, “there is a certain part of Wall Street that is very skeptical that television has good fundamentals today,” says longtime analyst Bishop Cheen.
RBC Capital Markets analyst David Bank makes a gutsy call this morning by designating CBS his “top pick” stock. Shares are already trading high: CBS closed yesterday at $31.33, right around its 52-week peak and close to its top price in pre-recession 2007. Yet Bank says he expects CBS to hit $38.