ViacomCBS, Discovery both fall 27%, leading media stock selloff



© Reuters.

By Sinéad Carew

(Reuters) – Shares in media companies ViacomCBS and Discovery Inc tumbled around 27% each on Friday, capping a week of declines and putting both stocks roughly 50% below their recent record highs.

ViacomCBS closed down $18.12 at $48.23, marking a record one-day percentage decline, with trading volume more than five times its 10-day moving average. The stock had hit a record high of $101.97 on March 15 before it started losing ground over several sessions.

Discovery shares dropped $15.85 to $41.90 in what was also its biggest one-day percentage decline, with volume surpassing eight times its 10-day moving average. That stock has now fallen 45.8% over five straight sessions of declines after hitting a record high of $78.14 on March 19.

Wells Fargo (NYSE:) on Friday downgraded Viacom to “underweight” from “equal weight” and slashed its price target for the stock from $82 to $59, citing a $2.7 billion equity sale by the company earlier in the week.

Both stocks had soared this year on increased appetite for undervalued names, newly launched streaming services and an unwinding of bearish investor bets. Viacom was still showing a 29% year-to-date gain compared with Discovery’s 39%. At their 2021 peaks Discovery was up about 160% year-to-date while ViacomCBS had risen as much as 174%.

“Maybe reality is setting in,” said Eric Handler at MKM Partners, who covers Discovery.

Large blocks of shares in both companies were put in the market on Friday, likely exacerbating the declines, Handler said.

Chris Marangi, co-chief investment officer for value at Gabelli Funds, which was Viacom’s second biggest holder of voting stock as of late January, also cited the outsize trades as a factor in the stocks’ sharp fall.

READ  Lyft Sees Rides Increasing Every Week Through the End of the Year

“It’s a massive amount of volume. That’s the reason” for Friday’s decline, said Marangi. Also on Friday Fox Corp shares fell 6.2% to $37.80 while News Corp fell 1.9% to $25.72.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here