Shares in Viacom and CBS both declined more than 8% Wednesday as investors absorbed the details of the companies’ long-awaited merger during a broader stock market retreat.
According to deadline.com, CBS stock closed at $44.62, 8% lower, and Viacom at $26.72, down 8.5%. Worries about weak economic data from China and Germany, as well as movement of Treasury bond yields, a key metric that can signal a potential recession, sent the Dow 30, Nasdaq and S&P 500 down sharply, with the Dow losing more than 800 points.
President Donald Trump returned to his Twitter battle station, assailing “clueless” Federal Reserve policy as the root cause of the “CRAZY INVERTED YIELD CURVE” (capitals his).
In the media and tech sectors, Viacom and CBS took some of the biggest hits. The only other stocks as much in the red were Discovery, AMC Entertainment, Nexstar Media Group and Sinclair Broadcast Group, all down between 7%-9%.
Bundled into this grim macroeconomic portrait was the day-after verdict of the market on the Viacom-CBS merger, which was formally unveiled Tuesday.
The long-awaited deal had long ago been priced in by most Wall Streeters. A day after the big reveal, though, the $30 billion, all-stock transaction has drawn some downbeat assessments from analysts, mostly on the CBS side. The main issue nagging at some analysts is the perceived risk of the merger tying an established, cash-generating larger player like CBS to the smaller and still-rebounding Viacom.
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