Entertaining splits, summer reading hits, and a celebrity throwing fits colored in the week that was.
Oh, no. Another splitting headache, thanks to MTV.
It's official. The same Viacom (NYSE:VIA) that spent years binging on leisure acquisitions is now breaking up. The entertainment conglomerate that started out as a modest theater chain before Sumner Redstone got aggressive and scooped up Paramount, Blockbuster (NYSE:BBI), CBS, and many more broadcasting properties will be splitting into two distinct entities. The company believes that its parts are worth more than its current sum.
The company retaining the Viacom moniker will offer investors the conglomerate's glitzier properties like MTV, Nickelodeon, and Comedy Central. The other appendage will be anchored by its CBS network, alongside steadier cash-flow producers like terrestrial radio and billboard advertising.
Since the company unloaded Blockbuster last year, it's been looking for ways to unlock shareholder value. Now if only Viacom knew where it put the key! Its collection of properties always seemed to make logistical sense, but the company was just too slow to connect the synergistic dots. Splitting the company in two won't alleviate the burden of fitting the pieces together. Really, it's just an admission of short-term failure, as the ultimate burden now shifts to the investors. They will have to decide which part of Viacom's split portrait is the one worth pocketing. Maybe it's both. Maybe it's none. But if you've always wanted your MTV, here's your chance.
Heavy books make for light summer reading
How eager are Harry Potter fans to get their hands on the sixth book in the young wizard's series? Well, even though the book is still weeks away from its July 16 release, the pre-orders keep piling up at Amazon.com (NASDAQ:AMZN). As of Thursday night, the online bookseller's Harry Potter meter was up to 585,000 books. That's more than 5% of the 10.8 million copies that Scholastic (NASDAQ:SCHL) will be printing in its initial run!
By teaming up with the U.S. Postal Service and UPS (NYSE:UPS) to assure that customers will receive their online orders the same day that the book hits your local bookstore, it's not much of a surprise that Amazon is cornering the Potter market. Parents are wooed by the convenience. Sure, Barnes & Noble (NYSE:BKS), like Amazon, is also marking the book down by 40%. Sure, B&N is also hosting "Midnight Magic Party" celebrations at its stores to make sure that aspiring wizards get their $17.99 hardcover copies at the first stroke of midnight. But it doesn't seem to matter. This is Amazon's moment to shine. The other booksellers seem to be flunking out of the Hogwarts School of Hype.
Fee the world -- let them know it's eBay time again
In a rather nasty attack on the world's leading auction site, Live 8 organizer Bob Geldof called eBay (NASDAQ:EBAY) "despicable" and an "electronic pimp" after free tickets that were distributed through a lottery found their way to the online marketplace's virtual bidding block.
I'm a fan of Geldof the humanitarian. I'm even a fan of Geldof the musical artist. I'm that one person in America who knows a Boomtown Rats song other than "I Don't Like Mondays." So I can't understand why Geldof would lash out at eBay. At a time when he is trying to raise awareness of poverty in Africa, he comes down on the one company that has lined lots of pockets by simplifying the garage-sale process? Bah! Yes, eBay is a creator of wealth. And no, I'm not cynical enough to suggest that eBay is the solution to Africa's hungry citizens, but it certainly shouldn't be considered the culprit. Yes, it's a shame that free tickets to a music show have real value in the open market.... Wait a minute. That's not a shame at all. Ultimately, it would provide even more exposure for the festival itself. So what's the deal Geldof? Why do you want to shoo-hoo-hoo-hoo-hoo-hoot the whole eBay down?
The headlines behind this week's stories:
Until next week, I remain,
Amazon.com and eBay are Motley Fool Stock Advisor recommendations.
Longtime Fool contributor Rick Munarriz thinks he may have been called an electronic pimp before. He does not own shares in any of the companies in this story. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
