Sumner Redstone Quotes
We understand that the real market value of Blockbuster may never be fully realized as a wholly owned part of Viacom.
Redstone, Sumner. "Viacom to Pursue Split-Off of Blockbuster." Viacom Inc. Press Release, 10 Feb. 2004.
This quotation is extremely important as it is one of The Prophets admonitions which preclude orthodox Muslims from partaking in modern finance. In this case, for example, financial vehicles like “short selling” would be prohibited, yet billions of dollars of short sales are made on world stock exchanges every day. In a “short sale”, you sell a stock that you do not own. When you do so, you are then obligated to deliver the stock, so at some point in the future, you must buy it in order to deliver it—called “covering” you short sale. When you buy it you may have to pay more money than you got for the sale, and you have lost money. If on the other hand, the stock price has gone down, when you buy it and deliver it, you will have made a profit. It is a particularly risky type of investment as there is no limit on how much you can lose. So called “Islamic finance” has come up with ways of paying interest or short selling that are disguised as something else, which some Sharia authorities have ruled is consistent with Islamic law.
When earning money is the primary driver of a business, that business has come under the control of people who no longer have the vision, interests or focus of the founders and the people who originally made it what it was. Making money is an important part of making a successful company, but if that is all, then unless one is an investor, there is no great advantage to becoming a customer. All of the great new companies started with a vision that may have included making money but went far beyond that.
“M&A” is the business abbreviation of “Mergers & Acquisitions”. There was a general belief on Wall Street that Mergers and Acquisitions almost always turned out to be good investments but that was based on observation. When they were analyzed statistically and objectively the conventional wisdom turned out to not be wisdom.
Sumner Murray Redstone was an American billionaire businessman and media magnate. He was the majority owner and chairman of the National Amusements theater chain. Through National Amusements, Redstone, up until his death, was, and his family remain, majority voting shareholders of mass media conglomerate ViacomCBS, in turn, the parent company of the Paramount Pictures film studio, the CBS television network, and various cable networks. According to Forbes, as of April 2020, he was worth US$2.6 billion.
