ViacomCBS shares fall as investors cast doubt on transmission execution

Shares of ViacomCBS continued to fall on Wednesday and traded more than 20% as investors continued to react to a new sale of shares and questioned the media company’s ability to successfully execute its transfer strategy.

The fall comes as a result of the fall in shares on Tuesday, when shares closed 9%. Shares began to fall this week after the company announced it would raise $ 3 billion from the new shares.

In a note Wednesday, Bank of America Securities analysts said ViacomCBS ‘move to broadcasting was “the right strategy” for the media company, “but difficult to execute.”

The company launched its Paramount + streaming service earlier this month. Media companies have been investing funds in new content as the field gets crowded and new stock sales funds could help Paramount + from their peers. But analysts warned that it will be difficult to compete with “large-scale streaming players” such as Netflix and Disney +.

In a note Tuesday, AB Bernstein analysts wrote that they supported the secondary rise, saying it could provide a cushion against declining advertising revenue or a way to invest more money in broadcasting. But analysts reiterated that the shares had an “excessively significant price” and warned that the company’s inherited business “insurmountable structural headwinds” and could “waste billions on transmission deals we believe will struggle to have the its own weight “.

ViacomCBS was not the only new entrant to broadcast a crash on Wednesday. Shares of Discovery fell to 10% after UBS downgraded the shares to sell them. Analysts wrote that their nascent screaming service “started from a better position than peers” with a stronger international presence and fewer inherited license offerings (i.e., less risk of cannibalizing existing revenues as passes to the transmission).

But the UBS note also warned: “We remain concerned about the ultimate scalability of the service in relation to the decline of the linear business.”