Viacom CBS Inc. (VIAC) stock declines during current market. Why is it so?

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Viacom CBS Inc. (VIAC) stock declined by 9.06% in previous trading close while the VIAC stock price continues to fall in the current market session by 14.85% after Viacom CBS announced the pricing of concurrent offerings of its Class B common stock. An American multinational mass media company ViacomCBS was created on December 4, 2019, when the second incarnation of CBS Corporation and the second incarnation of Viacom, which were separated from the first incarnation of Viacom in 2006, combined together. Viacom CBS focuses on creating good quality content for its audience around the world.

What is happening?

ViacomCBS Inc. today revealed the pricing of 20,000,000 shares of its Class B common stock, par value $0.001 per share, at an initial public offering price of $85.00 per share, and also 10,000,000 shares of its 5.75 percent Series A Mandatory Convertible Preferred Stock, par value $0.001 per share at an initial public offering price of $100.00 per share, with a preferred stock of $100.00 per share. VIAC has also provided the underwriters with a facility of additional 30-day options to buy up to 3,000,000 more shares of class B common stock 1,500,000 shares from Mandatory Convertible Preferred stock which is to cover the over-allotments in case it is present.

Now what?

This offering from VIAC is expected to finalize on March 26, 2021, depending on certain customary closing conditions. Also, the approximate idea about the capital that will be generated from the offering says that $1.67 billion will be generated from VIAC Class B common stock offering whereas $983.09 million would be the net proceeds from Mandatory Convertible Preferred Stock. While in case the underwriters utilize their options in full the net capital will be $1.93 billion and $1.13 billion for Class B common stock and Mandatory Convertible Preferred Stock, respectively. This is the approximate calculation after cutting the underwriting discounts and commissions and estimated offering, in both the cases mentioned above. ViacomCBS intended to use the net proceeds for general corporate purposes that also include investments in streaming.

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