ViacomCBS shares fell more than 15 percent on Wednesday after the media giant announced its $ 3 billion stock sale.
The company, which launched the Paramount Plus streaming service earlier this month, said it would use stock sales to “invest in streaming”.
ViacomCBS, which operates MTV, Paramount Studios, CBS and Comedy Central, said it preferred 20 million shares of its Class B common stock for $ 85 a share and a mandatory convertible for 10 million shares of its series. The stock will buy at $ 100 per share.
The company made an initial announcement of a $ 3 billion stock sale on Monday, closing a sales spree that saw the shares shed about 20 percent of their value in three days. The stock sale of the media giant represents a dilution of the equity of existing shareholders.
Even with CellOf, ViacomCBS shares are up more than 100 percent since the beginning of the year. The group’s market cap as of Wednesday morning was approximately $ 49 billion, more than double its price as of December 31, 2020, when it stood at $ 23 billion.
The company is making a significant change to streaming as it places more of its future on Paramount Plus, which debuted on March 4 and was a subscriber to the previous CBS All Access service.
At the end of 2020, ViacomCBS created around 29 million subscribers for its streaming platform worldwide and told investors that it was projected to earn 65 million to 75 million subscribers by 2024.
Last year, the company said it spent about $ 15 billion on content, including sports rights. By 2024, it expects to spend approximately $ 5 billion on streaming content, which will cover the cost of content for both linear TV and streaming platforms.
Viacom and CBS, which both own the national revision of Sherry Redstone, completed their merger in December 2019. Since then, the two companies have been cutting costs, building synergy and devising a strong streaming strategy to compete with the likes of Netflix, Disney +. , HBO Max and others.
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