Dec 3, 2019

Investors bearish as Viacom and CBS deal nears close

Data: Money.net; Chart: Andrew Witherspoon/Axios

The merger between Viacom and CBS is expected to close this week, but investors don't seem too excited about it. Shares from both companies have been down since the all-stock deal was formally announced in mid-August.

Why it matters: Analysts have expressed reservations about whether the combined company will be big enough to compete with the likes of Amazon and Netflix.

  • Last month, CBS was sued by an investor who argued the all-stock acquisition of Viacom is better for the company's majority shareholder Shari Redstone than other investors.

Yes, but: Viacom's business looks healthier than it has in a long time.

  • Last quarter, in its final as an independent company, Viacom's movie business Paramount reached full-year profitability for the first time since 2015, and its domestic TV business posted advertising growth for the first time in six years.

What they're saying: Redstone has argued that the new company, with a combined annual content investment of $13 billion, will be able to compete with the big tech giants in creating lots of good content.

  • Bob Bakish, the new CEO of the combined company, told CNBC's Jim Cramer Monday that neither he nor management are happy with the valuation of Viacom right now, but he believes that the marketplace will see the value of the combined company after the deal closes.

What's next: Layoffs are expected when companies of this size combine, particularly in redundant departments like personnel, sales or real estate.

Go deeper: CBS and Viacom agree to massive merger

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Local newspaper giants face cold winter

Data: Yahoo; Chart: Axios Visuals

Some of the largest local newspaper chains have seen their stocks tumble over the past few weeks, making further consolidation and job losses in the local newspaper space seem inevitable.

Why it matters: The crisis surrounding the collapse of local news is not just being felt by family-owned local newspaper chains, of which there are many, but also major conglomerates and publicly traded newspaper companies.

Go deeperArrowNov 19, 2019

New York learns a valuable lesson about subsidies

The westside of Manhattan, One World Trade Center and Hudson Yards. Photo: Gary Hershorn/Corbis via Getty Images

Without getting billions in tax write-offs or a signature helipad for CEO Jeff Bezos, Amazon announced it had signed a new lease for 335,000 square feet of real estate in the developing Hudson Yards neighborhood of Manhattan.

What's happening: The company said the building will be home to 1,500 employees, and represents "Amazon’s largest expansion in New York since the company stunned the city by abandoning plans to locate its second headquarters" there, WSJ's Keiko Morris reported Friday.

Go deeperArrowDec 9, 2019

Saudi Aramco's shrinking IPO

President and CEO of Saudi Aramco Amin Nasser (left), and Aramco's chairman Yasir al-Rumayyan (right).

Saudi Arabia's decision to abandon a $2 trillion valuation for the Aramco IPO underscores hurdles facing Crown Prince Mohammed bin Salman's plans to use the company as a tool for diversifying the kingdom’s crude-reliant economy.

Driving the news: ICYMI, over the weekend Aramco announced preliminary pricing on the offering that signals an estimated valuation of the world's largest oil-producing company in the $1.6–$1.7 trillion range.

Go deeperArrowNov 18, 2019