(Bloomberg) — ViacomCBS Inc. declined in late trading after announcing a $3 billion stock sale, with proceeds earmarked for its Paramount+ streaming service and other corporate purposes.
The company is offering $2 billion of Class B common shares and $1 billion of a preferred stock that is convertible into the Class B common, ViacomCBS said Monday. The shares are the company’s nonvoting equity. The newly issued stock will start trading on March 24, Bloomberg News reported.
ViacomCBS, like other media giants, is pushing into streaming in a big way through Paramount+ and through Pluto TV, a free multichannel online service. The company also renewed its broadcast rights to the National Football League last week in a deal that will cost roughly $2 billion annually.
With the share sale, the company is capitalizing on a rally that has turned the stock into the best performer in the S&P 500 this year, with a gain of almost 170%. Investors are betting that media companies like ViacomCBS and Discovery Inc. can use new streaming platforms to keep pace with the likes of Netflix Inc. and Walt Disney Co.
Shares of ViacomCBS fell as much as 4.2% to $96.10 in extended trading after the share sale was announced, reflecting the dilution that the offering will have on existing holdings. The Class A voting shares are controlled by National Amusements, the Redstone family’s holding company.
Morgan Stanley and JPMorgan Chase & Co. are managing the offering. ViacomCBS granted them options to purchase up to $450 million in additional shares.
(Updates with information on 2021 rally in fifth paragraph.)
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2021 Bloomberg L.P.
