Viacom Stock Tumbles 9 Percent After CBS Merger DOA

Viacom’s stock plummeted on Monday after Sumner Redstone’s National Amusements Inc. — the majority owner of both Viacom and CBS — announced earlier that morning that the two companies would not be merging.

Later in the day — less than an hour before markets closed — Viacom named acting CEO Bob Bakish to the position permanently. That move did not stem the tide, as the company’s stock continued its descent through the end of trading, closing down 9 percent.

Bakish was named acting CEO in October after previously overseeing Viacom’s international operations, which had grown revenue and profitability at a time when the company’s U.S. business struggled. At last week’s UBS Global Media & Communications Conference in New York, Bakish called U.S. MTV’s shift from music to reality and scripted television a “mistake,” drawing a contrast with the channel’s strategy in Europe.

Also Read: Viacom Names Bob Bakish as Permanent CEO as CBS Merger Evaporates

“We’ve grown share three years running,” he said at the conference. “You’ve seen what happened in the U.S.”

In a statement announcing Bakish being named as permanent CEO, Shari Redstone, Sumner’s daughter and vice chair of Viacom’s board, praised his strategic initiatives.

“I am very excited by the strategy Viacom is pursuing under Bob’s leadership, as well as the relentless hard work and passion he has demonstrated not only in his fast start at the helm but in his many years at the company,” she said in the statement. “While there is much work to do, I firmly believe that Viacom has a bright future, and that confidence is underpinned by senior management’s commitment to innovation and a more coordinated, global approach to managing our brands.”

Also Read: Viacom Stock Drops as CBS Backs Away From Merger Talks

But based on Monday’s sell-off, Wall Street appears less convinced.

Viacom’s stock is down 15 percent year-to-date and 21 percent over the last five years despite billions of dollars in buybacks, as its cable networks like MTV, Nickeleodeon and Comedy Central are under pressure from cord-cutting, and its Paramount Pictures movie studio hasn’t finished higher than sixth in market share since 2011.

14 Billion-Dollar Acquisitions Before AT&T-Time Warner (Photos)

Think $85 billion is a lot of cash? Take a tour through the lurid amounts of money dropped on American media and content machines over the years.
1999: Disney Buys ABC
The alliance is such a potent brand that it's hard to imagine them as solo entities, but the $19.5 billion sale gave the Disney company an iconic TV brand to call its own.
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1999: Clear Channel buys AMFM Inc
The radio giant paid $20.6 billion for its rival AMFM, their 830 radio stations, 425,000 billboards and 19 TV stations per Forbes.
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1999: Viacom Buys CBS
Fifteen years ago, the media giant acquired the TV network for $34.1 billion. While the companies would split in 2006, always remember -- history repeats itself.
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2000: Time Warner and AOL Merge
It's often referred to as one of the most disastrous mergers in history. The $186.2 billion price tag seemed visionary at the time, but quickly devolved into a corporate culture way... and the of the dot-com collapse.
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2006: Disney Buys Pixar
In the first of a series of key moves from Disney CEO Bob Iger -- ones that would ensure long-term health and eventually see the company take record-breaking market share -- Steve Jobs was convinced to entrust the animation studio to them for a reported $7.4 billion.
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2009: Disney Buys Marvel
Iger's $4 billion purchase of the comic book studio changed the industry, secured Robert Downey Jr. as the highest paid actor in Hollywood and made a new constellation of stars and film franchises.
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2012: Disney Buys Lucasfilm
Bob Iger's hat trick was completed with a major coup in landing the "Star Wars" universe for $4 billion, which resulted in the No. 3 all-time top grossing film, "Star Wars: The Force Awakens."
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2013: Comcast Buys Remaining Stake in NBC
After purchasing a majority stake in 2011 for $30 billion, Comcast paid another $16.7 billion to wholly own the TV brand, film studio Universal and its California and Florida theme parks.
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2013: Yahoo Buys Tumblr
It's a relatively small price for a media acquisition, but spend-happy Yahoo CEO Marissa Mayer raised a lot of eyebrows by paying $1 billion for the blogging platform Tumblr.
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2014: Facebook Buys WhatApp
While this is a straight-up tech acquisition, it's interesting to note that Facebook paid a staggering $22 billion for the European-based WhatsApp, a mobile application that lets users text for free over WiFi, to bolster their own messaging app. The company has repeatedly said it doesn't care to acquire content engines, but this signals a strong urge to level competition if they ever change their minds.
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2015: Activision Blizzard Buys King Mobile
The video game company literally spent $5.9 billion on fun and games. Mobile game company King counts the most successful app of all time, Candy Crush, and legacy social games like Bubble Witch in its stable. Now Activision gets to develop properties like a just-sold CBS game show based on Candy Crush.
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2016: Comcast Buys Dreamworks
After years of trying to offload his baby, Jeffrey Katzenberg fetched $3.8 billion for DWA and its respective franchises, like "Kung Fu Panda."
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2015: Dalian Wanda Buys Legendary Entertainment
A production company fetching $3.5 billion in a sale was not just jaw-dropping, it was an airhorn that the Chinese invasion into Hollywood had begun. It's also currently the benchmark for what many call inflated valuation... but Wanda's pockets are as deep as their patience is long.
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2016: Verizon Buys Yahoo
In a major deal that’s yet to formally close, Verizon is ponying up $4.83 billion for Yahoo’s core business, which includes advertising, content, search and mobile division.
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