Wednesday, January 18, 2006

CBS Redux

I have lately been busy with portfolio management activities. However, I made a note to comment on this new year's return of CBS as a listed equity issue. Viacom split, as of the new year, back into two parts again.

It seems like yesterday when Sumner Redstone went after CBS, declaring how powerful it would be to link content and distribution. Same old same old. Now it's five years later, and there he was, doddering around on the floor of the NYSE, babbling about how much value was being unlocked for shareholders by reversing what he did five years earlier.

Here's what really annoys me. If one of Redstone's lieutenants had made an error of this magnitude (excepting, perhaps, his daughter, now installed in the senior management of Viacom), that guy or woman would be history. Cashiered for wasting shareholder's money and pursuing grossly unprofitable ideas.

Instead, Sumner Redstone dictates to his shareholders that, having undone his colossal mistake, he'll still be chairman of both entities. Nice work if you can get it, eh?

As I noted in a recent post, there's not much to be done but sell the stocks if you owned them, or don't buy them if you don't already own them. Forget "corporate governance" as a relief on this one.

It just goes to show how one needs to take so much of Wall Street's sales pitches, and even those of bumbling, aging CEOs, with large grains of salt. Assuredly, they are more concerned with filling their own pockets than they are with filling yours.

Caveat emptor indeed.

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