Jefferies cuts Viaplay as challenges mount for new CEO

Modern Times MTG AB

26/06/2023 07:58

** Jefferies downgrades Viaplay  VPLAYb.ST  to
"underperform" from "hold", predicting continuous downgrades to
the troubled Swedish streaming company's earning and valuation 
    ** As giants like Netflix  NFLX.O , Disney  DIS.N  and
Amazon  AMZN.O  dominate in the subscription-video-on-demand
(SVOD) sector, Viaplay's original content "can secure a niche
position at best", the broker says
    ** It adds that although Viaplay has a content and pricing
strategy consistent with growth, "it lacks the resources of
global peers at a point when SVOD demand is contracting"
    ** Viaplay shares tumbled earlier in June as it cut outlook
and appointed former MTG  MTGb.ST  manager Jorgen Lindemann as
new CEO; Jefferies warns this change could result in a
suspension of the company's expansion
    ** Lindemann advocated convergence for Viaplay, not
internationalization, the broker says, expecting deeper
cost-cuts along with a move to wholesaling of sports rights
    ** With a net debt of 2.5 billion Swedish crowns ($233
million) and negative short-term earnings, constraints to
Viaplay's balance sheet have risen, Jefferies says
    ** Thus the market needs to put a lower probability on the
likelihood of sustainable profitability, it adds

($1 = 10.7061 Swedish crowns)

 (Reporting by Boleslaw Lasocki)
 ((boleslaw.lasocki@tr.com))