In their first day of trading as independent publicly traded companies, investors were putting their money into the newly streamlined Viacom Inc., driving its stock up nearly 4% ($1.54 per share) to $41.54 each, while showing a little less enthusiasm for its slower-growth brethren, CBS Corp., which enjoyed a nearly 3% gain (70 cents per share) to close at $26.20 each.
Viacom completed its split into two separate entities Jan. 1, cleaving into Viacom (consisting of higher-growth assets MTV Networks, the Paramount Pictures movie studio, Black Entertainment Television, Paramount Home Entertainment and Famous Music) and CBS (the CBS broadcast network, UPN, CBS Radio, Viacom Outdoor, Viacom Television Stations Group, Paramount Television, King World Productions, Simon & Schuster Inc., Showtime Networks Inc. and Paramount Parks). CBS will also include CSTV Networks Inc. when that acquisition closes later this month.
The new Viacom is led by former Viacom co-chief operating officer Tom Freston, while CBS is headed by former Viacom co-COO Les Moonves. Viacom chairman Sumner Redstone serves in that role in both companies.
Viacom proposed the split in June in an effort to unlock the value of its assets. Both stocks have been trading on a “when-issued” basis since early December, so the valuations have been known to investors for weeks.
Viacom shares had climbed as high as $45 per share on the when-issued market (up from around $32 per share) before dipping to about $40 prior to official trading on the New York Stock Exchange. CBS shares had ranged around $25-$30 apiece on the when-issued market prior to the official split.