When ViacomCBS (NASDAQ:VIAC) took advantage of the market’s folly by announcing a stock sale, shares plunged. At $100, VIAC stock traded at too high a price to ignore. The heavily indebted firm has a good line-up on its CBS channel.
Discovery (NASDAQ:DISCA) is similarly compelling. It, too, fell alongside VIAC’s stock drop. But because both stocks have a short float of over 10%, investors should wait for the stock to bottom.
ViacomCBS has Paramount Plus to count on for growth in the streaming services space. Expanding it globally will increase cash flow, which the firm may use to pay down its debt.
In mid-April, Credit Suisse was reportedly unloading its Discovery stock. And since investors cannot know for sure if the selling is done, the downside risks may continue for the near term. Adventurous investors may buy the stock now instead of waiting for the dust to settle.
Conservative investors who noticed Netflix (NASDAQ:NFLX) reporting weak subscription growth will not want to buy either stock at this time. The stocks still have a premium based on expected growth for streaming services. Customers are more likely to cancel services, keeping only a few. That will raise the competitive pressure for Paramount Plus and Discovery Live.
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