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Capital Calls ViacomCBS, GameStop cash grab

3 minute read

GameStop stock graph is seen in front of the company's logo in this illustration taken February 2, 2021. REUTERS/Dado Ruvic/Illustration

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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 read more .

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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 of proceeds in streaming, which at least matches one reason the stock has zoomed upward. Reddit star GameStop , which said it would invest any proceeds in e-commerce, is a different case. True, its fourth-quarter online revenue 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 read more

BA owner reaches into collateral cupboard read more

Japanese automakers go back in time read more

GoPuff tests tech theory of timing read more

Hartford’s easy deal gamble read more

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Editing by Richard Beales and Amanda Gomez

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