Viacom just changed its name and symbol to Paramount Global yesterday, and the news (along with a bad earnings report) has sent the shares tumbling. VL expected $0.50/sh but they came in at $0.26/sh. While revenues hit the mark, the earnings news has the rats fleeing. I own PARA and will be adding from here as the risk/reward is just too tempting at a PE of under 9. My question is, if you think PARA is worth the risk at PE 9, what about the preferred shares (PARAP) at 11% a year? Maybe the common makes sense if you believe the recovery story, but 11%?!?
I’m not smart enough to understand the mandatory conversion in 2 years. Would the common need to double in price before it’s worthwhile?
This looks like a busted convertible. Mandatory conversion on April 1 2024. Conversion ratio of 1.1764 common shares per 1 preffered share if the common is priced below$85 for the 20 trading days prior to the conversion date. So today’s market price is a combination of the dividend until 4-1-24 plus approximately $34.00 of value currently plus some amount of time value. 52,50-11,50 (dividend)-34.00 (market value). 9.00 time value?