4 months Discovery and Viacom are massively undervalued after the recent sell-off Reddit      

Discovery Inc (DISCA, DISCB or DISCK) and ViacomCBS Inc (VIAC) are both global media, entertainment and TV providers. They have both recently announced news that they will pursue on-demand TV through online platforms. They provide many thousands of hours of showtime each year with niche focuses such as hobbies and sports, that other competitors such as netflix, amazon prime do not provide. They have a competitive edge in this market and are not just another TV provider.

Furthermore, they were part of a huge sell-off from Archegos who used multiple bank funds and was overleveraged in many positions. After Archegos’ positions fell beyond a certain point, it forced the banks to close their positions to make up for the losses that occurred at Archegos. Viacom and Discovery both fell about 50-60% as a result of this making them hugely undervalued and the perfect time to buy the dip and buy the company at a discount.

What this ultimately means is that the price of the company fell, but the value for each of them remained the same. Before the crash, they both were growing like crazy as more investors and asset managers wanted to have them in their portfolios. They were announcing great uptake onto their respective streaming services and have done well during Covid. Both were showing promise and investors valued that as can be seen by an increasing price over several months.

IMO now is a great opportunity to get these companies at a great discount after a huge misstep by a big hedge fund and their partner banks. The excessive volume that is seen in the past days is significantly higher than on an average day before the price drop. Once things calm down both of these companies will begin to grow again and it already seems like it has started.

Disclaimer. I own both of these companies mentioned and I bought more in the past few days.

submitted by /u/michanik
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