Shares of Paramount Global shot up Tuesday morning after Berkshire Hathaway revealed that it bought up more shares of the parent of CBS Viacom and its namesake film studio.
The company’s “B” gained 9% to $20.21 in late morning trading, outpacing a strong rally on Wall Street.
The Dow Jones Industrial Average was up 0.81%, the S&P 500 added 1.5% and the Nasdaq Composite leaped 2.4% Tuesday, boosted by data from a manufacturing report that provided another indication inflation is easing. That news, in turn, strengthens the belief that the Federal Reserve will ease back on interest rate hikes.
Entertainment and media stocks broadly followed the market higher, but Paramount shares soared above the pack.
In a regulatory filing, Berkshire Hathaway said it increased its holdings of Paramount “B” shares to 91.2 million shares, or 15% of the stock available for trading, as of Sept. 30.
Buffett’s firm first disclosed that it had taken a stake in Paramount in May.
Boosting the position makes Berkshire the largest outside investor of Paramount’s class B shares, which are worth about $1.7 billion, as of Monday’s closing price, CNBC reported, citing Wells Fargo & Co. analyst Steven Cahall.
The holding does not give Buffett any voting power. Paramount is controlled through its Class A shares by National Amusements, chairman Shari Redstone’s holding company. Class A shares also gained Tuesday, rising 8.2% to $23.29.
Paramount reported mixed results for the third quarter earlier this month. The studio flew high with hits like the Tom Cruise-let “Top Gun: Maverick” and the thriller “Smile” at the summer box office, and reported that its streaming services booked 4.7 million new subscribers in the quarter to bring its total to nearly 67 million.
But despite heavy political advertising, its TV Media division, which houses CBS and its cable networks, saw revenue drop 5% year over year. Advertising revenue, which is slumping across the industry ahead of feared recession, fell 3%.
Paramount CFO Naveen Chopra is slated to speak Wednesday morning at an investors conference and may build on comments made by CEO Bob Bakish during the third-quarter call, when he touted the new content offerings coming in the next few months to its Paramount+ streaming service.
Other entertainment stocks recording gains in Tuesday’s trading included AMC Networks, up 5% to $22.09; Endeavor Group Holdings, up 5% to $23.01 and Lions Gate Entertainment, up 4% to $7.85.
Netflix added 4% to $311.52; Imax rose 4% to $15.42 and Warner Bros Discovery gained 3% to $11.85.
