Entertainment giant Paramount Skydance (PSKY) faced more than a little pushback from the beginning in its move to buy Warner Bros. Discovery (WBD). With the deal surprisingly close to completion pending regulatory consideration and a final shareholder vote, a resistance is brewing to shut down the deal before it can truly begin. Shares of Paramount Skydance slipped fractionally in the closing minutes of Monday’s trading.
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A letter signed by over 1,000 actors, directors and writers emerged opposing the deal, saying that the deal would only hurt the entertainment industry further. With two major studios becoming one, the letter suggests, opportunities for creators will drop. This will also have an impact on production jobs, and costs will likely increase as well.
The letter itself notes, “We have witnessed a steep decline in the number of films produced and released, alongside a narrowing of the kinds of stories that are financed and distributed. Increasingly, a small number of powerful entities determine what gets made — and on what terms — leaving creators and independent businesses with fewer viable paths to sustain their work.” Of course, much of this has been the case from the beginning; just ask any writer with a trunk script.
Avatar Leak
Meanwhile, Paramount found out that its secrecy was not exactly up to snuff either, as the upcoming feature cartoon Avatar: Aang, The Last Airbender had some of its footage unexpectedly leaked. The news was already troubling enough for some, who found out that the movie will not be hitting theaters after all and instead going directly to streaming services. But now, the leak only makes things worse.
The leak featured two entire clips posted to X. Given that Paramount has not so much as released a still image, it is impossible to tell if the images were real. But the X user who posted the clips noted that, if Paramount failed to release a trailer in the next few days, said user would livestream the entire film, suggesting that some part of it did indeed get leaked. With only a few months left until the film’s release date in October, this represents several sets of bad news colliding all at once.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PSKY stock based on five Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 0.65% loss in its share price over the past year, the average PSKY price target of $11.38 per share implies 6.26% upside potential.
