CBS stock regained some ground in the afternoon but closed down 1.5% at $55.21 as investors seemed to register at least some concern about its strategic direction and leadership team.
Investors have had a lot to process as rumors of Les Moonves’ exit as chairman and CEO came to fruition over the weekend. In early trading, the stock was down more than 3.5% as investors took measure of the company’s unanswered questions. Trading volume today was more than three times the average level.
CBS shares have been on a roller-coaster ride in 2018, surrendering about 7% to date, even though the company’s financial performance has been solid. As the year began, talks were heating up with one-time corporate sibling Viacom about a re-merger, though other, larger players reportedly also were expressing interest. Discussions with Viacom blew up and soon segued into Moonves’ ouster over sexual misconduct allegations from more than a dozen women.
Viacom gained a fraction today to close at $29.07. It has gained 5% in the past 12 months but is slightly underwater in 2018 to date.
Steven Cahall of RBC Capital Markets, who maintains an “outperform” rating on CBS, said the news would bring what he described as “clearing skies” to a cloudy landscape.
“CBS has been hamstrung by events of corporate governance and leadership changes, and this has arguably made it uninvestable for much of the buyside,” Cahall said. “These clearing events should allow interest to re-emerge, though a permanent CEO is admittedly still a key uncertainty.