Paramount Shares Nosedive As Content Spend Spooks Investors


By Jonathan Easton

The share price of Paramount Global (née ViacomCBS) dropped by over 20 per cent on Wednesday as investors reacted to the media giant’s announced streaming refocus.

On wednesday, the company announced a major rebrand to go fully in on its streaming businesses including Paramount+, Showtime and BET+. As a part of this, Paramount said that it would invest more than US$6 billion in content by 2024, more than US$1 billion than what it previously had pledged.

This, combined with the company’s earnings miss, has evidently spooked investors, with shares dropping 21 per cent as shareholders cast fresh doubt over Paramount’s ability to stay profitable in the streaming age.

The company has been a relative late entrant into the mainstream streaming market, with Paramount+ only gaining steam now when its rivals like WarnerMedia and Disney are far more established with much larger subscriber bases.

A number of analysts have questioned the strategic shift, including MoffettNathanson analyst Robert Fishman who said that Paramount’s losses will continue to increase until 2023. He wrote: “Despite the big announcement of ViacomCBS changing its name to Paramount … we are left with a similar question as we had last year: will the company be able to grow EBITA and FCF again to match prior levels?

BofA analyst Jessica Reif Ehrlich meanwhile has downgraded the stock to ‘neutral’, cooling on the company as a potential acquisition target.

Paramount’s upcoming pipeline of content includes the delayed Mission Impossible sequel, 2023’s A Quiet Place: Part III and its big-budget adaptation of iconic video game series Halo as a Paramount+ original which has just been greenlit for a second season.

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