ViacomCBS Inc. lost more than half of its market capitalization last week—yet it still remains nearly four times as valuable as it was a year ago.
The wild gyrations in the media giant’s stock since the 2019 combination of CBS and Viacom have been unlike that of any large media company over the past couple of years, according to Dow Jones Market Data. ViacomCBS’s stock has moved by 2.43% on average every day over that period, compared with an average of 1.74% for all the S&P 500 stocks.
The swings partly reflect the myriad challenges ViacomCBS had faced over that period, from having to integrate both companies to dealing with the coronavirus pandemic to readjusting its priorities to focus on streaming. The stock had risen roughly ninefold over the course of a year before last week’s collapse, which came amid an avalanche of forced selling by New York-based hedge fund Archegos Capital Management and banks.
Another media company, Discovery Inc., suffered similar losses last week as part of the fund’s unwinding. Both companies are cable-TV conglomerates that have bet big on streaming video. ViacomCBS’s stock has been somewhat more vulnerable.
“Discovery was stronger heading into the pandemic because their networks have held up better in the long run,” media analyst Michael Nathanson said in an interview. “Discovery’s networks tended to skew older and have had more durable viewing habits because of the genres they’re in. Whereas Viacom’s skew a lot younger and tend to see more erosion in viewership.”
