MOONVES CAN STAY
Will remain CBS boss amid sex harass probe
Les Moonves lives to fight another day.
The CBS chairman and chief executive will remain in charge of the media giant while the company investigates allegations of sexual misconduct by six women over the last few decades, the New York company’s board confirmed on Monday.
The board, at a regularly scheduled meeting, said it is in the process of selecting a law firm to “conduct an independent investigation” into the allegations — made public Friday in a story in the New Yorker.
The board was said to have been weighing a move that would have sidelined Moonves during the probe.
But the board, in announcing the process to hire a law firm, said “[n]o other action was taken on this matter.”
Two of the six women also claimed Moonves moved to ruin their careers after they rebuffed his advances.
Moonves acknowledged behavior “decades ago” that made some women “uncomfortable,” but said he has never “misused my position to harm or hinder anyone’s career.”
While the board begins to peel back the layers of the story, some investors have already made up their minds: Head for the hills.
Shares of CBS fell 5.1 percent on Monday to $51.28 — after slipping 6.1 percent on Friday after news of the expected New Yorker story started echoing around media and finance circles.
Meanwhile, CFRA Research downgraded CBS on Monday from buy to hold, citing the un- clear near-term outlook for the company.
“While Mr. Moonves has mostly denied the allegations, we see a range of potential outcomes that could make his tenure become increasingly tenuous, amid heightened sensitivity to the so-called #MeToo movement,” said CFRA analyst Tuna Amobi.
The New Yorker story, by reporter Ronan Farrow, comes while CBS is battling Shari Redstone, whose family controls the media giant — as well as Viacom. Redstone is pressing a merger of the two com- panies, and Moonves is fighting that effort.
A CBS move to weaken the Redstones’ grip on the company was countered by National Amusements Inc., the family holding company. The issue is now before a Delaware judge — with a trial date in October.
At Monday’s board meeting, the CBS annual meeting — slated to take place in Pasadena, Calif., on Aug. 10 — was moved. No new date or location was set.
“We see a particularly inauspicious timing for CBS, currently embroiled in a highstakes litigation against [NAI], its controlling shareholder under the direction of Shari Redstone, who might seek to exert further leverage under the current circumstances,” CFRA’s Amobi wrote.
“Regardless of Moonves’ personal fate, his future and the future of nine other CBS board of directors is now in question,” said BTIG analyst Rich Greenfield. Not all analysts are bearish. Alan Gould, of Loop Capital, cautioned investors to hang on. Loop has a buy rating on CBS with a price target of $60.
“While the emotional reaction is to sell CBS on the release of the long-rumored and damaging New Yorker article regarding CBS CEO Les Moonves, we believe the stock is undervalued,” Gould noted.