Capital Calls-ViacomCBS, GameStop cash grab

Paramount Global

24/03/2021 15:00

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    NEW YORK, March 24 (Reuters Breakingviews) - Concise
insights on global finance in the Covid-19 era.
 
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CAPITAL RAISE. When times are good, cashing in is smart. Media
group ViacomCBS  VIACA.O , worth over $50 billion, is taking
advantage of its surging stock price to sell equity, and $10
billion-plus video-game retailer GameStop  GME.N  may do the
same  urn:newsml:reuters.com:*:nL4N2LM2SD. 
    The opportunity is clear. Over the past three months,
ViacomCBS stock has more than doubled and GameStop is up more
than sixfold against indexes that have barely budged. Selling
pricey shares beats expensive buybacks, something ViacomCBS used
to indulge in, and both companies can afford the share-price
declines that came on Tuesday.
    The media company plans to invest its up to $3 billion https://ir.viacomcbs.com/news-releases/news-release-details/viacomcbs-prices-offerings-class-b-common-stock-and-mandatory
 of proceeds in streaming, which at least matches one reason the
stock has zoomed upward. Reddit star GameStop  urn:newsml:reuters.com:*:nL1N2K018E,
which said it would invest any proceeds in e-commerce, is a
different case. True, its fourth-quarter online revenue https://investor.gamestop.com/news-releases/news-release-details/gamestop-reports-fourth-quarter-and-fiscal-2020-results
 surged 175% year-on-year, but overall quarterly sales fell 3%
to $2.1 billion. Social-media love doesn't make the investment
case any stronger. (By Jennifer Saba)

    Earlier in Capital Calls:
    
    Italy’s Leonardo misses out on IPO boom  urn:newsml:reuters.com:*:nL4N2LM3MD
    BA owner reaches into collateral cupboard  urn:newsml:reuters.com:*:nL1N2LM0PM
    Japanese automakers go back in time  urn:newsml:reuters.com:*:nL1N2LM0AA
    GoPuff tests tech theory of timing  urn:newsml:reuters.com:*:nL1N2LL31K
    Hartford’s easy deal gamble  urn:newsml:reuters.com:*:nL1N2LL25V
    
             
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 (Editing by Richard Beales and Amanda Gomez)