Downgrade For CBS On Moonves Mess


A detailed article appearing late Friday in The New Yorker that details alleged sexual misconduct by CBS Chairman/CEO Les Moonves continued to wreak havoc on the company’s stock.

One Wall Street financial house downgraded CBS shares over the matter, while CBS’s Board of Directors opted to hire outside counsel for a probe of Moonves, who isn’t going anywhere.

The downgrade came from CFRA Research.

In an investor note, CFRA analyst Tuna Amobi said, “While Mr. Moonves has mostly denied the allegations, we see a range of potential outcomes that could make his tenure become increasingly tenuous, amid heightened sensitivity to the #MeToo movement.”

Amobi also noted that CFRA sees “a particularly inauspicious timing for CBS,” given its “high-stakes litigation” against controlling shareholder National Amusements Inc. and one Shari Redstone, “who might seek to exert further leverage under the current circumstance.”

Redstone has called for a “thorough, open and transparent” investigation of Moonves.

This caught Amobi’s attention. “We see potential far-reaching implications for CBS’s corporate governance and possible questions related to management succession.”

As such, Amobi lowered CBS to “Hold” from “Buy.”

At the Closing Bell on Monday (7/30), CBS shares were down 5% from Friday’s close, ending at $51.28. Volume was brisk at 15.66 million shares; average trading volume for CBS is 3.5 million shares.

CBS started Thursday’s trading session at $58.20.

Shares were $59.30 on July 11.

While USA TODAY briefly offered an erroneous report that Moonves had been suspended from his duties, CBS Corp. announced that its Board of Directors is in the process of selecting outside counsel to conduct an independent investigation.

No other action was taken on this matter at today’s board meeting.

However, the Board elected to postpone CBS Corp.’s annual shareholders meeting scheduled for August 10.

The Board will soon determine a new record date for the 2018 annual meeting of stockholders and will publicly disclose the new date, time and location in the near future.

Meanwhile, the CBS Board offered to give shareholders a small bit of positive news: it approved a quarterly dividend on the company’s stock of $0.18 per share. The dividend is payable on October 1 to shareholders of record on Sept. 10, 2018.