Viacom stock gets hit hard due to a 785 million dollar write down

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By Jacob Maslow

viacom logoCable content giant, Viacom (NASDAQ:VIA.B), is facing a lot of downward pressure due to its 785 million Dollar Pre-Tax write down for the second quarter of the year 2015. This write down relates to its ongoing restructuring, in addition to moving divisions around, going over the company’s divisions, business lines, and structure. It has also announced a rolling series of layoffs. The hope is that the restructuring would produce a better programming and a tighter revenue stream from its current media assets.

All told, the company is projecting its restructuring to yield its substantial savings. We are talking about 175 million dollars in savings for fiscal in the year 2015 alone. This is on top of ongoing yearly savings of around 350 million Dollars.

This write down is weighing heavily on the stock because it also comes on the heels of news that Viacom will be pausing its stock buyback program. It has quite a bit of debt and wants to maintain a certain debt ratio. The company said that it expects to revive its stock buyback program not later than October, which marks its new fiscal year.

This is the kind of news that should make would be investors who are bullish on Viacom to swoop in at discounted rates. Wait for the news to weigh on the stock further. Viacom is a solid media company and, assuming its turnaround plan works, it might be worth a lot more than its current market valuation. Still, it should look into wireless mobile streaming content partnerships if it wants to remain relevant over the long haul.

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