CBS Corporation (NYSE: CBS) option implied volatility at record levels:
Reasons for the volatility:
1) Chairman Sumner Redstone, the largest shareholder, publicly feuding with her daughter and heir apparent, Shari Redstone.
2) CBS Radio facing increased competition if the Federal Communications Commission (FCC) allows Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) to merge. The leader of the combined SIRI company would be current SIRI CEO Mel Karmazin, a past leader of CBS Radio and Viacom, Inc. (NYSE: VIA).
3) Decreasing broadcasting revenue growth guidance.
4) The expectations of a CBS News and Katie Couric partnership-spin-out.
CBS has a market cap of $18.8 billion with long term debt of $7 billion. CBS had September 2007 quarterly total income of $3.2 billion. CBS over all option implied volatility of 31 was above its 26-week average of 25 according to Track Data, suggesting non-directional price fluctuations.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
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Reader Comments (Page 1 of 1)
11-13-2007 @ 5:44PM
Connie Reed said...
I admire Mr. Redstone and his daughter. Family
and business together are a whole different ballgame. Plus, the new Mrs. Redstone I know gave
up her outstanding position of teaching. Teachers with her dedication and love of children to transform these youngsters to reach their potential
is rare these days. However many situations come
into play: 1. Mr. Redstone needs to hand over the
reigns and stop being stubborn-enjoy your life!
2. His daughter deserves respect from him, loyalty
and trust.Blood is thicker than water. As for the
rest of the gang who LOVE TO DIVIDE AND CONQUER they should be thankful for what the
Redstone family has done for them. 3. Keep any other so-called family members out of the loop, this is a great option. I have been through this on a very,very small scale and I know others who have been here and do not wait until it hurts everyone- especially the most important people in
this situation. Mr. Redstone please do not make it harder than it is and do not forget keep those
so-called wonderful pied pipers out of it. You only
live once- now it is your turn to let go and enjoy
life.