ViacomCBS, Roku Stock Jump on Report of Comcast M&A Speculation

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Dreamstime

Sometimes it doesn’t take much to get a stock moving on a quiet day for the broader market. A sentence at the end of the fifth paragraph in a larger Wall Street Journal report about

Comcast

CEO Brian Roberts’ strategy ignited M&A speculation related to

Roku

and

ViacomCBS.

The Journal reported, citing a person close to the Comcast chief executive, that a potential merger with ViacomCBS or an acquisition of Roku are among the ideas on the table for Roberts. The Journal also wrote Roberts “doesn’t feel a need to seek a merger.”

Representatives at Roku, Comcast, and ViacomCBS declined to comment.

As for ViacomCBS, this isn’t the first time it’s been floated as a merger target for Comcast. But as BofA Global Research media analyst Jessica Reif Ehrlich noted last month, such a deal would likely require a spinoff of CBS, given Comcast already owns NBC.

Even so, shares of

ViacomCBS

(VIAC) and

Roku

(ROKU) jumped shortly after the story was published at 2:42 p.m. EDT. ViacomCBS stock popped as high as $42.97, but pared to a gain of 2.7% at $41.84. Roku stock closed up 4.5% to $421.70, while

Comcast

stock (CMCSA) closed down 3.7% to $55.48.

Roku stock was already rising Wednesday afternoon after Deutsche Bank analyst Jeffrey Rand wrote that he thinks the connected television firm is more than a stay-at-home play. Though Roku stock got caught in broader dip for pandemic favorites this spring, shares are up about 47% from their 2021 lows from May. Aside from sales of devices that let customers to access streaming services, the company makes money from advertisements on its platform.

Rand thinks viewership and advertising trends could signal Roku’s second-quarter results beat expectations. Longer-term, he’s bullish on the company due to the broader shift to streaming, and Roku’s competitive positioning in the market. He maintained a Buy rating and $500 price target.

Write to Connor Smith at connor.smith@barrons.com