Ramblings on ViacomCBS – VIAC
So, if you know about VIAC, you know about the Archegos, Bill let’s Hwang Chung tonight blowout that happened in late March. Since then it has been incredibly frustrating to watch VIAC get pinned at max pain because the hedge funds/market makers are selling covered calls. However, if you’re reading this, you know that VIAC has everything going for it. I’m not going to post the fundamentals; however, following on Michael Burry’s investment strategies, a few things should help you sleep well at night – as long as you have shares or leaps – and that is margin of safety, ev/ebitda, and that sweet, sweet, free cash flow, which really tells you about the “future” of a company; if it’s undervalued all the better; but what jumps off the page when you look at VIAC with its measly $26 billion market cap? Yep, that big ole fat free cash flow number.
So while the MMs might be able to pin it at max pain to bank the premium, what can’t be stopped is a big catalyst: merger/acquisition – unlikely, I know – another double upgrade; an activist investor – yes, Shari owns the majority of class A, but it doesn’t mean an activist couldn’t come in and still try and shake things up. Or a catalyst I’m not even thinking of, who the heck knows,but all it’ll take is the right spark, and VIAC explodes.
We could see advance streaming numbers before Q2 ER that show VIAC’s streaming subs – AVOD/Pluto and SVOD/P+ are increasing, a lot. In fact I’m watching Pluto TV right now, not just because I’m invested in VIAC, but it’s actually really good to just throw on a movie or TV show, do other stuff, like post on Reddit; and it’s free, just download app, boom, there it is streaming for free; and it truly is a super funnel to P+.
Of course we know how big the Mayweathe PPV was on Showtime on Sunday, and QP II was highest grossing movie in theaters over Memorial Day weekend and during the pandemic. We have March Madness finals, Masters finals, PGA/Mickelson win final, and a few other big viewing events during Q2 that will generate big ad revs from CBS; and CBS has 6 of the top 10 prime time network shows. Of course just dropped Infinite on P+, which I’m saving to watch until tomorrow night with the old lady and eating some Chinese: and 1,000 movies. I can’t say I am overly excited about the selection of the 1,000 movies, but it’s probably because I have watched every damn decent movie over the last year, but it’s a lot better than what was on P+, that’s for sure. Let’s hope they work on the interface, like a watch list.
Don’t forget, ViacomCBS is the second, SECOND largest producer of content, only behind Disney. That’s right. Google it! And, importantly, they are vertically integrated. Also, it’s ALL they do, produce and distribute content, that’s it. They don’t do cable/cell service or run an amusement park. They ONLY make and distribute content and can distribute it via their own networks. That’s huge, and they are truly the only last big content producer left standing on their own – remember Viacom and CBS merger was just a merger of Redstone owned companies, it wasn’t a “real” merger.
We all know about the spate of upgrades as well. Plus Farmer Jim and Dan Niles pumping VIAC on CNBC. Also of course Soros, Simmons, and Tepper taking big positions in Q1. It’s really sort of ridiculous how positive everything is for VIAC when you put it all together, and this is precisely what you have to keep reminding yourself of when we keep getting pinned on a frustrating day like today after a decent day yesterday.
What I can say for sure is that, despite the frustration, I don’t dare exit my position. That would keep me up at night, because all I’d think about is “today is the day the big move happens.” Because it will, at some point. I hate mentioning SI, but it’s a real factor as well. There is still decent SI and daily short volume, enough that when all the positives, the huge number of them, all swirl together in the face of a big catalyst, this will make a move and be gone faster than you can blink, and you’ll just be staring at your screen, paralyzed, unable to buy, thinking “it can’t be”… but it will be gone. But if you just sit on your shares and leaps, after the last agonizing two and a half months, you’ll have the biggest smile on your face when VIAC takes off, as well as the IV, because you knew, knew it all along, there was just too many positive things in VIAC’s favor for it not to happen.
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June 10, 2021 at 06:19PM