Did you ever imagine that media conglomerate ViacomCBS (NASDAQ:VIAC) would enter into the metaverse, where non-fungible tokens (NFTs) reside? Now’s not the time to sleep on VIAC stock as the company is venturing into new and exciting markets.
Some folks still have bad memories associated with ViacomCBS. You might recall the time when, earlier this year, Archegos Capital unwound its excessively leveraged position in ViacomCBS, causing the share price to crash.
As an informed investor, you have to ask yourself: should I really blame ViacomCBS for Archegos Capital’s mistakes? Or, is there a prime opportunity here with VIAC stock?
A deeper dive into ViacomCBS will reveal that there could be a bargain here and that even an established media company can evolve and modernize to meet the demands of its customers.
VIAC Stock at a Glance
It could be argued that, prior to the Archegos Capital incident, VIAC stock was in a bubble.
The stock started off 2021 at $36 and change, but then catapulted to a 52-week high of $100.42 by March 22.
This was excessive, as it wasn’t accompanied by any news catalysts to justify such a sharp price move. It’s possible that Reddit users were involved in that run-up, though it’s difficult to prove this hypothesis.
Because of the Archegos incident, the VIAC stock price was cut in half within a couple of weeks. By mid-April, the stock had declined to $40.
Fast-forward six months, and the ViacomCBS share price is hovering below $40.
It seems that Wall Street still hasn’t forgiven the company, even if ViacomCBS didn’t really do anything wrong.
So now, VIAC stock has a trailing 12-month price-to-earnings ratio of just 7.34.
Value-focused investors might want to jump at the chance to pick up some shares, as they won’t necessarily be this cheap for much longer.
A First Step into the Metaverse
“ViacomCBS is one of the first major media and entertainment companies to enter the metaverse in a significant way.” That’s a quote from Trevor George and Zach Bruch, the co-CEOs of RECUR, a leading NFT company.
Through a strategic partnership, the two companies plan to create a platform that will bring ViacomCBS’s intellectual property and franchises into the NFT-populated metaverse.
In this environment, fans will be able to buy, collect and trade NFTs as digital products and collectables.
ViacomCBS is well-known for its vast portfolio of consumer brands, including BET, MTV, CBS, Paramount Pictures, Comedy Central, Nickelodeon and Showtime Networks.
It makes sense for ViacomCBS to collaborate with RECUR, as that company already has expertise in the area of NFTs.
A Fast-Growing Market
ViacomCBS Consumer Products President Pam Kaufman further explained how the partnership will benefit the consumers.
“In teaming up with RECUR to create an NFT platform dedicated to ViacomCBS IP, voracious collectors and first-time NFT buyers alike will find unique opportunities to own a piece of their favorite franchises,” Kaufman stated.
Of course, the company’s stakeholders should expect this partnership to benefit ViacomCBS, as well.
According to Nigel Green, the CEO of financial advisory organisation deVere, the NFT market hit new highs in the second quarter of 2021, with $2.5 billion in sales year-to-date.
“This is almost 20 times more than the $13.7 million in the first half of 2020,” Green added.
So clearly, there’s plenty of money to be made in the metaverse, as NFTs comprise a fast-growing market.
Granted, ViacomCBS certainly isn’t the first business to gain exposure to the metaverse. Still, at least the company is being proactive and taking advantage of the opportunity now.
VIAC stock still hasn’t recovered, even half a year after the Archegos blow-up.
Consequently, the stock is still trading at a low valuation.
Meanwhile, ViacomCBS is venturing into the high-potential world of branded NFT’s.
This foray into the metaverse demonstrates ViacomCBS’s willingness to adapt to changing markets, and should make VIAC stock more attractive to forward-thinking investors.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place