ViacomCBS stock tanks, losing more than half its value in less than a week.

ViacomCBS, the media goliath led by Shari Redstone, took a nosedive this week, with the company losing more than half of its market value in just four days.

The stock was trading at $ 100 on Monday. By Friday close of trading, it had fallen to just over $ 48, a decline of more than 51 percent in less than a week.

There’s no better way to put it: The company’s stock was fueling.

What happened? Several things at the same time. First off, it’s worth noting that ViacomCBS was actually on its knees a bit by the time it crashed this week and has grown almost tenfold in the past 12 months. It was trading at around $ 12 per share about a year ago.

That rally came when the company, like the rest of the media industry, took a step towards streaming. Recently, Paramount + was launched to compete against Netflix, Disney +, HBO Max, and others. The service leveraged ViacomCBS’s extensive archive of content from the CBS broadcast network, Paramount Film Studios, and several cable channels including Nickelodeon and MTV.

This shift is important as ViacomCBS has been hit hard by an overall decline in cable viewers. The company’s pre-tax profits are down nearly 17 percent in the last two years, and debt has exceeded $ 21 billion.

However, the stock rose so much that Robert M. Bakish, CEO of ViacomCBS, decided to take advantage of the blessing by offering new shares to raise up to $ 3 billion. The underwriters who managed the sale valued the offering earlier this week at around $ 85 per share, a discount from Monday’s trading booth.

You could say it backfired. When a company issues new shares, it usually dilutes the value of current shareholders, so expect some price decline. A few days after the offer, one of Wall Street’s most influential research firms, MoffettNathanson, released a report questioning the company’s value and downgrading the stock to a “sale.” The stock should only be worth $ 55, MoffettNathanson said. With that the nosedive began.

“We never thought Viacom would trade near $ 100 a share,” said the report, written by Michael Nathanson, a co-founder of the company. “Obviously, ViacomCBS’s management didn’t either,” it continued, citing the new stock offering.

Streaming is still a money-losing company, and that means the legacy media companies will have to suffer even more losses for several years before they can return to profitability.

In the case of ViacomCBS, it seemed to accelerate cable cutting when it signed a new licensing agreement with the NFL that will cost the company more than $ 2 billion a year by 2033. As part of the agreement, ViacomCBS also plans to cable stream the games on Paramount +, which is much cheaper than a bundle of cables.

As the premium program games move to streaming, “the industry is at risk of both cable cutting and more eroding viewers,” wrote Nathanson.

On Friday, an analyst at Wells Fargo also downgraded the stock, lowering the bank’s price target to $ 59.

But the market decided it wasn’t even worth that much. It barely closed a quarter above $ 48 on Friday.

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