What are the chances that Sumner Redstone will sell Viacom Inc.'s Paramount Pictures? Zip. But one Wall Street analyst, Rich Greenfield of Pali Reserach, thinks it's a good idea and is urging the octogenarian media mogul to unload the historic studio. "Paramount has become Sumner Redstone's 'sports team,' " Greenfield wrote in a report today. While Paramount is profitable, he writes that the studio's "annual cash flow drives a valuation that is well below its private market value." Greenfield estimates that the studio's film library generates "at least" $400 million to $500 milllion annually, "implying" that Paramount would be worth $4 billion to $5 billion to a buyer. But that value, Greenfield attests, is not reflected in parent Viacom Inc.'s stock price. It's not every day that a Wall Street analyst brazenly challenges one of the media companies he covers, and Greenfield wasn't mincing words in his report. "Investors increasingly loathe Viacom due to a nearly non-existent management team (with no access to anyone involved in operations), who have done a poor job explaining why they are underperforming peers in advertising sales growth, as well as failing to provide a clear understanding of the timing and potential scale of revenues and profits from its emerging video game business," Greenfield writes. Not surprisingly then, Greenfield cut his 2008 EPS estimate for Viacom to $2.65 per share from $2.69 per share and knocked down ...
Anytime
What are the chances that Sumner Redstone will sell Viacom Inc.'s Paramount Pictures? Zip. But one Wall Street analyst, Rich Greenfield of Pali Reserach, thinks it's a good idea and is urging the octogenarian media mogul to unload the historic studio. "Paramount has become Sumner Redstone's 'sports team,' " Greenfield wrote in a report today. While Paramount is profitable, he writes that the studio's "annual cash flow drives a valuation that is well below its private market value." Greenfield estimates that the studio's film library generates "at least" $400 million to $500 milllion annually, "implying" that Paramount would be worth $4 billion to $5 billion to a buyer. But that value, Greenfield attests, is not reflected in parent Viacom Inc.'s stock price. It's not every day that a Wall Street analyst brazenly challenges one of the media companies he covers, and Greenfield wasn't mincing words in his report. "Investors increasingly loathe Viacom due to a nearly non-existent management team (with no access to anyone involved in operations), who have done a poor job explaining why they are underperforming peers in advertising sales growth, as well as failing to provide a clear understanding of the timing and potential scale of revenues and profits from its emerging video game business," Greenfield writes. Not surprisingly then, Greenfield cut his 2008 EPS estimate for Viacom to $2.65 per share from $2.69 per share and knocked down ...