CBS stock is on pace for its worst daily performance in 6½ years.
CBS shares fell 6 percent Friday afternoon on the news that CEO Leslie Moonves is accused of sexual misconduct in an upcoming Ronan Farrow expose.
CBS stock was on pace for its worst daily performance since Oct. 2,2011, when it dropped 7.02 percent.
The expose will be published in The New Yorker, CNBC has confirmed. The New Yorker article’s impending publication was first reported by The Hollywood Reporter, which said the story was to be published later in the day.
According to THR, the article alleges that Moonves engaged in inappropriate sexual behavior including unwanted touching and kissing that is said to have occurred 20 years ago.
Farrow won a Pulitzer Prize for his reporting on Harvey Weinstein and the longstanding patterns of sexual misconduct. The revelations ultimately spurred the #MeToo movement.
The allegations against Moonves follow CBS’s ouster of Charlie Rose last fall for allegations of sexual misconduct. CBS directors said in a statement to CNBC, “All allegations of personal misconduct are to be taken seriously.”
Moonves has opposed efforts by Shari Redstone to merge CBS with Viacom. Redstone’s National Amusements is the principal shareholder of both companies, which had split into separate publicly traded corporations in late 2005.
Viacom shares rose 2.3 percent on news of the New Yorker article.
In May, CBS filed a lawsuit against Shari Redstone, her father Sumner Redstone and NAI alleging that NAI’s proposed CBS-Viacom merger “is not in the best interests of CBS stockholders.” The Redstone family later filed a complaint alleging that CBS had no legal right to strip them of voting privileges.
A trial date was set for Oct. 3 in Delaware Chancery Court. CBS’s annual meeting was set for Aug. 10 in Pasadena, California.
Here’s CBS’ full statement:
—CNBC’s David Faber and Marty Steinberg contributed to this report.
