Oprah sold most of her stake in the OWN cable channel to Discovery Communications
News that Oprah Winfrey just sold most of her stake in the OWN cable channel to majority owner Discovery Communications Inc. (NASDAQ:DISCA) is sending the broadcasting concern higher this morning. The sale is worth more than $36 million, and will boost the company's stake in OWN to 95%. While the deal suggests a decline in business, it may create more growth and expansion opportunities going forward. In addition, the channel's content will be part of Discovery's new streaming service -- expected to launch next month.
At last check, DISCA is up 1.8% at $27.71, cutting the recent decline from its 10-month high just below the $29 level short. In fact, the security is set to snap a four-day losing streak -- its longest since late October. Year-to-date, Discovery stock remains down 16.3%.
This negative price action has grabbed option bears' attention. This is per the equity's 10-day put/call volume ratio of 1.04 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 84% of readings from the past year. This suggests a healthier-than-usual appetite for long puts of late.
Shorts have been building their positions, too, with short interest up 2.3% in the last two reporting periods. This accounts for a heavy 29.3% of the stock's available float, or nearly two weeks of trading at DISCA's average daily pace.