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Paramount Stock Drops 5% On Skydance Merger News
Paramount Global stock fell 5% on Thursday as investors absorbed details of the company's merger agreement with Skydance Media.
Analysts had generally mixed reactions to the merger news, matching the overall investor sentiment, as they digested financial projections and comments during a nearly hour-long call with Skydance principals Monday morning. “That said, specific details on key issues including future structure of the streaming service, management of the portfolio of linear network assets, and expanded use of technology to drive growth remain in development. Doug Creutz of TD Cowen, who has a “hold” rating” on the stock, summed up his sentiments in the title of his report to clients: “New Ownership, New Leadership, Old Issues.” Teaming up with Skydance offers a “mild positive for Paramount’s longer-term fundamentals, largely due to the deleveraging from $1.5 billion in cash being infused to Paramount’s balance sheet,” he wrote, “but we don’t think the deal significantly impacts competitive positioning or changes exposure to industry headwinds.”
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