Is ViacomCBS a Good Investment?

PHOTO CREDIT: Yahoo Finance

OVERVIEW

ViacomCBS Incorporation is a company based in the United States. The company develops media and entertainment around the world. They distribute news, sports, and other shows through Cable Television and Paramount+ (their new streaming platform). The company was founded in 1986.

Why You Should?

1. The company will continue to see rising demand for their products as they diversify their products into a DTC (direct-to-consumer) business model. If they manage and develop DTC well (Paramount+), then they can gain new consumers who enjoy streaming CBS shows and content from anywhere. This will benefit the company.
2. ViacomCBS offers a wide range of media and entertainment for its customers. From live sports and news broadcasts to popular shows for everyone in the family, the company has an entertainment option for everyone. This wide range of products will benefit the company and its investors.
3. ViacomCBS has invested heavily into its current and future content offerings. Some popular current shows include SpongeBob and Star Trek. As the company continues to develop its content offerings, it will be able to gain new customers and retain others for a longer period of time. This will benefit the company and its investors.

Why You Should Not?

1. ViacomCBS faces tough competition from other entertainment and media companies like Netflix, Google, Facebook, Disney, FOX, and many others. This competition might hurt the company and its investors in the future.
2. ViacomCBS has tough competition, but the most worrying has to be Amazon and Disney. Amazon has been expanding its footprint into the streaming and entertainment industry through Prime Video. Similarly, Disney has had a jump against ViacomCBS through its DTC platform, Disney+. These companies have the cash and other resources to beat ViacomCBS.
3. Another concerning aspect of investing in ViacomCBS stock is the fall of Archegos capital. This fund held around 10% of the company’s stock and when it went bankrupt, it had to sell all of its ViacomCBS stock. This caused the company’s stock price to fall over 50% and reduced positive investor sentiment in the company. This hurt the company and its investors.
4. The company has also been negatively impacted by the pandemic as they have had to delay the creation of new shows and content and also caused the company to delay Paramount+. This will continue to hurt the company in the short to mid-term and might also hurt investors during this time period as well.

MY OPINION

I think that there are better media and entertainment companies to invest in because of tough competition (especially from companies like Amazon and Disney), negative impacts from the pandemic, the fall of Archegos capital, as well as negative impacts from the pandemic. However, the company’s growth into DTC is promising, its wide range of content, as well as its good pipeline of content.