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Feb 17
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SHORT
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News Anchors
Financial Reporters
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"Paramount had, to the market's mind, undervalued the legacy networks and... given them a set an essential valuation of of, near zero." If sophisticated industry insiders (Paramount bankers) are valuing traditional cable and network assets at zero during M&A due diligence, the broader market is likely overvaluing pure-play legacy media stocks that lack robust streaming growth. This serves as a bearish signal for the entire legacy media sector, suggesting terminal decline is being priced in by acquirers. Legacy assets may still generate significant short-term cash flow despite low terminal value. |
Bloomberg Markets
Warner Bros. Reopens Talks With Rival Paramou...
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Feb 13
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AVOID
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Jerry Coghlan
CEO, Pella Capital
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Coghlan observes a "real dispersion" in credit markets. While the index is fine, there is a "growing tail of companies in software, insurance brokers, asset managers, and media" experiencing significant price declines in their debt. This is the "AI Disruption" trade hitting credit markets. Investors are "re-underwriting cash flows" for the next 20 years, fearing AI will make legacy business models in these sectors obsolete. If bondholders are selling, equity is likely next or already suffering. AVOID debt and equity of legacy firms in these sectors; they are being repriced for existential risk. AI disruption proves slower than anticipated, leading to a relief rally in beaten-down legacy names. |
Bloomberg Markets
US CPI Fuels Fed Wagers, US Inflation Comes I...
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