(Bloomberg) — A rally in ViacomCBS Inc. and Discovery Inc. that pushed the media companies to the top of the S&P 500 Index this year further unraveled on Friday after another major Wall Street firm said the stocks were overvalued.

ViacomCBS and Discovery posted their biggest declines ever in the aftermath of a downgrade by Wells Fargo, which joined a chorus of firms that have also turned more bearish on the stocks this year.

ViacomCBS closed 27% lower to $48.23, down from a high of $100.34 on March 22. Discovery also slumped 27% to $41.90, down from $77.27 on March 19. Other media stocks tumbled, too, with AMC Networks Inc. losing 6.4% and Fox Corp. retreating 6.2%.

All of these companies are crowding into the streaming market, where they face intense competition from established leaders like Netflix Inc., Walt Disney Co. and Amazon.com Inc. They have less to offer in the breadth and popularity of their programming and face a tough fight. At the same time, they are losing traditional pay-TV customers to the bigger players.

“We do see gravity pulling the multiples closer to prior norms,” Wells Fargo analyst Steven Cahall said in a note.

Both stocks saw their valuations stretched by ferocious rallies this year. Viacom, at its peak price just over $100, was trading for almost 25 times analyst estimates for 2021 adjusted earnings compiled by Bloomberg, its highest multiple in a decade. At $77.27 on March 19, Discovery fetched almost 27 times.

The selloff began on Monday when ViacomCBS reported an offering of $2 billion in shares after closing at a record high. The stock fell 9.1% the following day, dragging down Discovery. On Friday, large block trades on both shares said to be offered via Goldman Sachs and Morgan Stanley, added to the selling pressure.

Viacom and Discovery shares are echoing volatility in a host of companies that soared on lockdown trades, including Zillow Group and Peloton Inc. and to some degree the entire blank-check SPAC space.

In a statement Friday, Discovery said the “today’s trading activity is not the result of insider transactions or transactions by Advance/Newhouse Programming Partnership or its affiliates.” The company also reiterated first-quarter guidance provided at an investor conference earlier this month.

Streaming Strategy

Shares of the companies had risen sharply on expectations that they, too, would lure million of subscribers to their new streaming services. ViacomCBS was up 169% this year before the selling set in, while Discovery had gained 157% and AMC Networks had more than doubled.

Taking advantage of the runup, CBS raised $2.65 billion in a stock offering this week, gaining funds to support the expansion of its Paramount+ streaming service, which charges $10 a month.

Read more: Disney+, Netflix hikes bring cost of cord-cutter package to $92

With the debut of Paramount+, every major media company is now marketing streaming of some sort, from Fox’s Tubi to Comcast Corp.’s Peacock and the Discovery+ offering at $5 a month, vying for the attention of households that have about four services on average.

If you bought all of their flagship online services, you’d be paying $92 a month, in line with the typical cable TV package. Plus, you’d still have to subscribe to costly additional services to obtain the most-popular live sports and entertainment programming from the major TV networks.

(Updates with analysts comments, valuation details and closing prices)

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