The stock price of CBS Corporation fell dramatically again Tuesday. The stock has been in freefall since dropping below $5 last week – the official line for penny stock territory. Many pension funds and other institutional investors are not allowed to hold penny stocks, so that’s led to a sell-off that’s driven the price ever lower.
CBS Class B, the company’s most widely traded non-voting stock, fell below the five buck mark for the first time after CEO Les Moonves reported Q4 results on February 18th and announced that the company was slashing its dividend. Even so, the stock price recovered for a while. But since February 25th it has been falling sharply every session.
The Class B shares dropped another 9.8% Tuesday to close at $3.60. Fewer Class A shares trade publicly, since the voting stock is mostly owned by Sumner Redstone’s National Amusements Inc. Even so, the Class A shares were down 7.6% Tuesday to close at $3.65.
RBR/TVBR observation: How will the plunging CBS stock price affect Sumner Redstone’s still-pending deal to refinance $1.46 billion of debt at National Amusements Inc., the company through which he controls both CBS and Viacom? The deal with the lenders uses his CBS stock as part of the security for the loans – and that security has been falling in value every day lately.