In 2007, Viacom (NYSE: VIA) was just about the only big media firm not to see a decline in its shares. Since then the stock has joined its peers, falling from a 52-week high near $45 to below $33 today. The solution, says Pali Research analyst Rich Greenfield (sub req’d): take the company private. He says he argued the same thing two years ago, back when debt was cheap and plentiful, and that two years later the stock is down 2 percent. The argument (which is kind of theoretical, since the debt markets may not be so hospitable) is basically a financial one: under his analysis, a Redstone-backed group could pay $38.50 per share, saddle it up with $21 billion in debt and make a nice profit. Even at $49 per share, such a deal would be break-even.
Besides the financial argument, there’s another reason the company might be better off going private: it reduces the pressure on it to do something just for the sake of doing something. That was the reaction among some when CBS (NYSE: CBS) announced the CNET (NSDQ: CNET) buy. WSJ’s Evan Newmark summed up the problem, offering a completely fictional dialog between CEO Les Moonves and his board:
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