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Sometimes it doesn’t take much to move a stock on a calm day relative to the broader market. A sentence at the end of the fifth paragraph in a larger Wall Street Journal report on Comcast CEO Brian Roberts’ strategy has fueled merger and acquisition speculation regarding Roku and ViacomCBS.
Among the ideas on Roberts’ table are a possible merger with ViacomCBS or a Roku acquisition, the newspaper reported, citing a person close to the CEO of Comcast. The newspaper also wrote that Roberts “doesn’t feel the need to seek integration”.
Representatives for Roku, Comcast and ViacomCBS declined to comment.
For ViacomCBS, this isn’t the first time it’s been brought up as a merger target for Comcast. But as Jessica Reeve-Ehrlich, a media analyst for BofA Global Research, pointed out last month, such a deal would likely require a subsidiary of CBS, given that Comcast already owns NBC.
However, shares of ViacomCBS (VIAC) and Roku (ROKU) jumped shortly after the story was published at 2:42 PM ET. ViacomCBS stock rose to $42.97, but fell to 2.7% at $41.84. Roku stock closed 4.5% higher at $421.70, while Comcast (CMCSA) stock closed 3.7% lower at $55.48.
Roku’s stock was already rising Wednesday afternoon after Deutsche Bank analyst Jeffrey Rand wrote that he believes the connected TV company is more than just home play. Although Roku’s stock has fallen into a broader decline due to the pandemic favorite this spring, shares are up about 47% from their 2021 lows from May. Aside from sales of devices that allow customers to access streaming services, the company makes money from advertising on its platform.
Rand believes that viewing and advertising trends could indicate that Roku’s second-quarter results beat expectations. In the long term, he’s bullish on the company due to the broader shift to streaming, and Roku’s competitive position in the market. It has maintained a buy rating and a price target of $500.
Write to Connor Smith at [email protected]
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