Bloomberg
ViacomCBS sinks after announcing $ 3 billion share offer
(Bloomberg) – ViacomCBS Inc. fell by 10% after announcing a $ 3 billion share sale, an effort to capitalize on a recent stock run and increase spending on its streaming service Paramount +. The company is offering $ 2 billion in Class B common shares and $ 1 billion in preferred shares convertible into class B common shares, ViacomCBS said on Monday. The shares are the company’s non-voting shareholders’ equity. The newly issued shares will begin trading on March 24, Bloomberg News reported. ViacomCBS, like other media giants, is advancing streaming on a large scale through Paramount + and Pluto TV, a free online multichannel service. The company also renewed its broadcasting rights for the National Football League last week in a deal that will cost about $ 2 billion annually. The sale of shares follows a rise that turned the stock into the best performance in the S&P 500 this year, with a gain of almost 170% until the close of Monday. Investors are betting that smaller media companies, such as ViacomCBS and Discovery Inc., may use new streaming platforms to attract paying subscribers, such as those of Netflix Inc. and Walt Disney Co. ViacomCBS shares fell 7.3% for US $ 93.03 on Tuesday in New York, after falling as low as $ 90.30, reflecting the dilution the offering will have on existing holdings. Class A voting shares are controlled by National Amusements, the holding company of the Redstone family. Morgan Stanley and JPMorgan Chase & Co. are managing the offering. ViacomCBS gave them options to purchase up to $ 450 million in additional shares (updates with Tuesday’s trades starting in the first paragraph). For more articles like this, visit us at bloomberg.comSubscribe now to stay on top of the most trusted business news source. © 2021 Bloomberg LP