Benzinga’s PreMarket Prep airs every morning from 8 a.m. to 9 a.m. ET. During this quick and highly informative hour, traders and investors tune in to get the top news for the day, the catalysts behind these moves, and the corresponding price action for the upcoming session.
Each day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick as well as producer Spencer Israel.
After a prolonged decline of a problem from a high level, a catalyst is needed to push it higher again.
A Wall Street Journal article provided a potential catalyst for ViacomCBS Inc. (NASDAQ: VIAB), which is the preparation day stock before it goes to market on Thursday.
ViacomCBS bounces back from March 2020 low: After ending 2019 at $ 41.97, ViacomCBS fell with the broad market during the March 2020 meltdown. It hit a low in March with the broad market at $ 10.10 and started to rebound.
This low is just above its September low of $ 9.74. It still finished the year ($ 37.26) in the red 11% but added 268% from its March low.
Archegos Hedge Fund and the ViacomCBS rally: While some explosive market rallies can be explained by fundamentals, others cannot, and ViacomCBS is one of them.
In the first few months of 2021, Archegos Hedge Fund faced a reckless margin requirement from some of the biggest companies on Wall Street, which drove up the price of ViacomCBS and other issues. .
When the price reversed in ViacomCBS, these companies left the holdings as quickly as possible.,
ViacomCBS’s dreaded stock offering: It took 2.5 months for the show to climb from its year-end close ($ 37.26) to peak at $ 101.97 on March 15, 2021. The show experienced a brief two-day retreat at $ 86.17 and was last back in triple digits on March 22, when it peaked at $ 100.42 and posted its all-time high of $ 100.34.
On Tuesday, March 23, the company announced a $ 3 billion equity offering of equity securities to help fund investments in its streaming service Paramount +, which launched in March. The company valued 20 million shares of its Class B common stock at $ 85 per share on March 24.
The uncertainty over the offer obviously prompted some investors to exit the issue. On Tuesday, the show went from $ 100.34 to $ 91.25 – a level it may never reach again.
Guess March 24 ViacomCBS High: An offer price often provides a floor or ceiling for an issue. It can be a floor when investors outside the supply decide they want to enter the same place as the big guys.
It can be used as a cap when investors in the offer want to exit immediately and / or others decide that if the business sells, they want to sell too.
ViacomCBS investors rush to release: The triple effect of investors who stuck to the offer, others seeking to lock in profits and companies liquidating Archegos Capital’s stake created a massive sell crescendo.
In eight trading sessions, the issue was halved from its all-time high, closing the April 5 session at $ 42.90.
Consolidation station: As of April 8, the show has been in a range of $ 37.33 to $ 44.26, with a majority of the price action between $ 39 and $ 42.
ViacomCBS price action excluding rumor: The show was offered late Wednesday and ended the session up $ 1.06 to $ 41.94.
It added to those gains during Thursday’s session and is trading up 2.63% to $ 42.94 in the last check.
The stock is yet to pass the high of recent trading, with the high for the sessions standing at $ 43.23.
The discussion on ViacomCBS from Wednesday’s show can be found here:
Photo: Courtesy of ViacomCBS.