ViacomCBS Shares Down by 23% on Wednesday

The entertainment conglomerate’s stocks fell as Wall Street cast doubt about Viacom’s ability to stream.


Shares of ViacomCBS have fallen by more than 30 percent over the past few days. On Wednesday, the entertainment company’s stock closed 23 percent lower as analysts from Bank of America weighed concerns that Viacom may not have the ability to execute streaming. Doubts were also cast that Viacom would have a hard time competing against other streaming giants, like Disney+ and Netflix.

Viacom had already seen its shares dip on Tuesday when it closed down by 9 percent. Shares initially began to fall when the company said it would raise $3 billion from new stock offerings.

Bank of America’s security analysts alluded that ViacomCBS’s plan to stream services was a good strategy but that it would be difficult to execute.

ViacomCBS released its Paramount+ streaming services in early March. A few media companies have been funding new content, but the field is seeing more crowding, and new stock sale funding from its peers might help Paramount+. However, analysts sent out a warning that ViacomCBS would have a difficult time competing against “large-scaled streaming players.”

AB Bernstein’s analysts also noted that they supported the raise, citing that it might offer a cushion against ad revenue downturns or that the funds could be used to support streaming services. But the analysts cautioned that Viacom’s stock was overpriced. They warned that Viacom faced “insurmountable structural headwinds,” and it could very well “waste billions on streaming offerings that we believe will struggle to carry their own weight.”

Viacom wasn’t the only media company to be the target of viability streaming concerns. Discovery shares fell after Bernstein noted similar doubts. The television channel’s stock was down by more than 13 percent after the UBS investment bank downgraded Discovery’s stock to sell. But, analysts did say that Discovery’s streaming service was “starting from a better position than peers” and had a stronger international presence. UBS also warned that “we remain concerned regarding the ultimate scalability of the service in relation to the decline of the linear business.”


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