Discovery (DISCA) - Get Report shares fell after Credit Suisse dumped $2 billion of stocks after the market closed on Tuesday, including the TV network stalwart, in a continuation of the Archegos Capital Management debacle, Reuters reports.
Credit Suisse held the shares as collateral on Archegos’ losing bets on the companies. Discovery slid 4.3% to $38.65 in pre-market trading Wednesday and has lost 40% over the past month.
Credit Suisse put 19 million class A shares and 22 million class C shares of Discovery on the market at prices below their closing prices on Tuesday, as well as 35 million U.S.-listed shares of iQIYI, according to Reuters. CNBC was the first to report news of Credit Suisse's offer.
Last week, TheStreet.com founder Jim Cramer analyzed how Goldman Sachs (GS) - Get Report and Credit Suisse handled the Archegos crisis differently. Goldman Sachs dumped its collateral more quickly, avoiding material losses it said. Meanwhile, Credit Suisse got hammered with $4.7 billion in losses.
As for Discovery, Morningstar analyst Neil Macker puts fair value at $39 for the stock. “Discovery Communications produces and owns unique content with proven appeal to audiences across cultures and languages,” he wrote in a commentary Tuesday.
“This transnational appeal provides the company with the ability to repurpose the content across multiple platforms and international borders.”
Further, “Discovery’s three primary traditional networks [Discovery, HGTV and Food] have wide distribution in the U.S. and worldwide, with each channel reaching over 85 million U.S. cable households and more than 200 million international households,” Macker said.
“Given its reach, the company is able to repurpose its programming to provide localized versions.”