(Bloomberg) — A rally in ViacomCBS Inc. and Discovery Inc. that pushed the media companies to the top of the S&P 500 Index this year further unraveled on Friday after another major Wall Street firm said the stocks were overvalued.
ViacomCBS and Discovery posted their biggest declines ever in afternoon trading in New York in the aftermath of a downgrade by Wells Fargo, which joined a chorus of several other firms which have also turned more bearish on the stocks this year.
Adding to the selling pressure, large block trades on both shares were offered via Goldman Sachs and Morgan Stanley, according to a person familiar with the matter.
ViacomCBS traded at $46.50 and Discovery was at $40.67 at 1:46 p.m. in New York, and down from record highs of $100.34 and $77.27, respectively.
Both media companies have fallen out of favor on Wall Street and analysts warn their stock rallies fueled by optimism about their streaming services are overdone. Traders have piled into ViacomCBS, with the stock soaring as much as 169% this year, after the launch of its Paramount+ service stoked investor optimism.
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