2 Media Stocks Testing Fresh Lows

It's not just Netflix that's been getting hammered

There's been a lot of action around media stocks lately, with investors mostly watching the huge sell-off in Netflix (NFLX) shares. However, other names in the space have also been getting pummeled, including CBS Corporation (NYSE:CBS) and Spotify Technology SA (NYSE:SPOT), both of which are trading near multi-month lows after Wells Fargo initiated coverage on the securities with "underperform" ratings.

In response, CBS shares have shed 2.7% to trade at $40.82, putting it just above its 52-week low of $40.65, and just above Wells Fargo's price target of $40. Some traders could be betting on more downside, too, with new positions opening at the October 39 put today. This would be just more of the same from CBS options traders, since the equity's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 1.57 -- ranking in the 84th annual percentile.

The equity has attracted the bearish attention by sliding 17% in the past three months, with most of the losses coming from the reaction to its Viacom deal. Most analysts are maintaining "buy" or "strong buy" ratings, though, so downgrades could come through and pressure the shares even more.

Spotify stock has also been falling fast, today shedding 4.8% to trade at $115.73 -- right near Wells Fargo's new price target of $115. This brings the shares' three-month decline to almost 20%, and today they're eyeing their lowest close since early January.

As for options activity, SPOT puts are crossing at twice the expected rate today, with new positions opening at the October 115 put. Most popular overall, however, is the weekly 11/1 122-strike call, though it looks like much of this action is of the sell-to-open variety, with traders expecting a ceiling at $122. From a broader view, the Schaeffer's put/call open interest ratio (SOIR) of 0.95 ranks in the 99th annual percentile, showing near-term open interest is much less call-heavy than usual.