ViacomCBS Announces $3 Billion Secondary Offering

Media giant’s move to help fund streaming efforts comes after big runup in share prices since the beginning of the year.
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ViacomCBS  (VIAB) - Get Report  (VIACA) - Get Report said after the bell Monday it will sell $3 billion in stock via two secondary offerings to boost funding for its streaming services.

The company plans to sell $2 billion of its Class B common stock and $1 billion of its Series A Mandatory Convertible Preferred stock. ViacomCBS said it granted the underwriters separate 30-day options to buy up to $300 million of Class B common stock and up to $150 million of Mandatory Convertible Preferred.

Morgan Stanley and J.P. Morgan are acting as joint book-running managers for the offerings.

“ViacomCBS intends to use the combined net proceeds from the Offerings for general corporate purposes, including investments in streaming,” the company said in a statement.

ViacomCBS is pursuing its streaming video strategy through its Paramount+ and Pluto TV offerings. The heavily competitive space has been dominated by Netflix  (NFLX) - Get Report and Walt Disney Co.'s  (DIS) - Get Report fast surging Disney+, which recently topped 100 million subscribers.

ViacomCBS’s secondary offering comes as the stock has nearly tripled since the start of the year.

In Monday’s regular trading, ViacomCBS shares rose 3% to $100.34. Following the secondary offering announcement, the stock fell in after-hours trading, losing $3.75, or 3.7%, to $96.59.

Last week, the National Football League announced that CBS has won the rights to continue carrying American Football Conference Sunday afternoon games for the 10-year period from 2023 to 2033. All of the games will be broadcast on the CBS Television Network and streamed live on Paramount+. CBS will carry the Super Bowl in 2023, 2027 and 2031. The will cost the network a reported $2 billion a year. 

Oprah Winfrey's interview with Prince Harry and Meghan Markle clocked 17.1 million viewers for CBS on March 7, according to data from ratings provider Nielsen, helping to boost the shares the following day

And last week, TheStreet’s Jim Cramer commented on the stocks recent run here.