Overleveraged hedge fund position on VIAC is giving the little guys opportunity to load up on on VIAC longer term call options
Comment:
ViacomCBS (VIAC) is down 55% in nearly two weeks and the fundamentals of the company have not changed.
VIAC priced an offering at $85 per share, the institutions/hedge-funds who bought at those levels have no choice but to reduce their cost basis at current levels.
The forced liquidation of Archegos Capital lead to massive VIAC blocks being sold in the market at a discounted price, which aided to the nasty continuous sell-off. There’s been a drastic decline in volume the past few days which signals that the liquidation phase is near or at its end.
VIAC’s bullish momentum came from a few factors: Their new streaming service Paramount+ releasing, ViacomCBS reaching 11-year agreement with the NFL, strong earnings, extremely cheap valuation relative to market, and a company that follows the value/reopening/cyclical trend in a higher yield environment.
ViacomCBS is not some meme company, it’s a company with a strong balance sheet that produces real profits.
Paramount+ growth and success will stem from ViacomCBS’s brands and their unique model.
Paramount+ offers live sports (NFL, Europa League, March Madness, Masters Tourney), news, original content, and a large library of older content from their various brands.
ViacomCBS brands: Paramount Studios (Star Trek), Showtime (Billions) Nickelodeon (Avatar, Spongebob), CBS, BET, MTV, Comedy Central, Pluto TV, etc.
They recently signed a 11-year contract with the NFL that gives them multi-platform rights, allows them to stream them on Paramount+.
The launch of their new streaming service and transition into the digital age helps their growth prospects.
Valuation currently is dirt cheap sitting at a PE Ratio of 11 and trading significantly under it’s fair value price
Technicals: Price has been consolidating around $45, near it’s 200 DMA, multiple indicators showing oversold.
Shorters are getting greedy, short percent of float is near 19%
The reason to invest in VIAC over VIACA is because of the large difference in volume/liquidity in their shares and options.
Recent Price Targets for VIAC: Benchmark Firm gives $120, Citi gives $92, Needham gives $80, Goldman Sachs gives $75, BMO Capital gives $70
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VIAC priced an offering at $85 per share, the institutions/hedge-funds who bought at those levels have no choice but to reduce their cost basis at current levels.
The forced liquidation of Archegos Capital lead to massive VIAC blocks being sold in the market at a discounted price, which aided to the nasty continuous sell-off. There’s been a drastic decline in volume the past few days which signals that the liquidation phase is near or at its end.
VIAC’s bullish momentum came from a few factors: Their new streaming service Paramount+ releasing, ViacomCBS reaching 11-year agreement with the NFL, strong earnings, extremely cheap valuation relative to market, and a company that follows the value/reopening/cyclical trend in a higher yield environment.
ViacomCBS is not some meme company, it’s a company with a strong balance sheet that produces real profits.
Paramount+ growth and success will stem from ViacomCBS’s brands and their unique model.
Paramount+ offers live sports (NFL, Europa League, March Madness, Masters Tourney), news, original content, and a large library of older content from their various brands.
ViacomCBS brands: Paramount Studios (Star Trek), Showtime (Billions) Nickelodeon (Avatar, Spongebob), CBS, BET, MTV, Comedy Central, Pluto TV, etc.
They recently signed a 11-year contract with the NFL that gives them multi-platform rights, allows them to stream them on Paramount+.
The launch of their new streaming service and transition into the digital age helps their growth prospects.
Valuation currently is dirt cheap sitting at a PE Ratio of 11 and trading significantly under it’s fair value price
Technicals: Price has been consolidating around $45, near it’s 200 DMA, multiple indicators showing oversold.
Shorters are getting greedy, short percent of float is near 19%
The reason to invest in VIAC over VIACA is because of the large difference in volume/liquidity in their shares and options.
Recent Price Targets for VIAC: Benchmark Firm gives $120, Citi gives $92, Needham gives $80, Goldman Sachs gives $75, BMO Capital gives $70