by Thinus Ferreira
MultiChoice shares fell 12% on Tuesday over investors' growing fears about the massive amount of money the Randburg-based pay-TV operator intends to pour into its video streaming service Showmax under a new joint-venture with NBCUniversal and Comcast.
MultiChoice was downgraded as J.P. Morgan now believes that MultiChoice intends to "throw considerably more money at Showmax that what the market expects".
MultiChoice plans to retool Showmax completely but at the cost of billions in order to try and compete effectively against global streaming giants like Netflix, Amazon Prime Video, Disney+ and Apple TV+ as traditional linear pay-TV sees its fortunes and traditional pay-TV bundle being evicerated worldwide.
Reuters reports that J.P. Morgan has downgraded MultiChoice from "neutral" to an "underweight" rating.
According to analysts it shows an expectation that MultiChoice is going to underperform over the next 6 to 12 months - essentially a recommendation to investors to sell their shares in MultiChoice.
