In what looks like a margin call of massive proportions, billionaire media tycoon Sumner Redstone is being forced to unload $400 million worth of nonvoting shares in CBS and Viacom to satisfy debts of his privately held National Amusements
Reuters reports that NAIRI, a subsidiary of National Amusements, will sell an equal dollar amount of shares in CBS and Viacom. Redstone is the chairman of CBS, Viacom and National Amusements.
CBS shares have fallen 74 percent in the past year while Viacom dropped 60 percent. Both issues are likely to face downward pressure as Redstone liquidates shares on the open market.
If Redstone were to unload a $200 million stake in each company at today’s prices he would be looking at selling 12.1 million shares of Viacom and 24.7 million shares of CBS. He will probably have to sell even more, as his selling is likely to force the price of the shares down further than Friday’s closing prices.
CBS had its own bad news on Friday. In a press release on its web site, the company announced slowing revenues. CBS also said it expects to write down $14 billion in the third quarter “to reduce the carrying value of goodwill, intangible assets related to FCC licenses and investments.”
Viacom also warned Friday that advertising revenues were below what analysts had estimated.
Click here to sign up for the Muckety Newsletter
0 Comments
There are no comments yet, be the first by filling in the form below.
Leave a Comment