“Industry-Wide Linear Declines”: Layoff Plans Send Paramount Stock (NASDAQ:PARA) Up

With industry figures talking about a “nightmare scenario” at entertainment giant Paramount (PARA), it is clear something is up within the studio. And newly-announced plans for widespread layoffs certainly underscored that fact. But investors tend to like news of layoffs, as it means more cash available. Today was no exception as the broad-based job losses meant modest gains on Paramount stock in the closing minutes of Tuesday’s trading.

Paramount has already been cutting jobs, but now, another 3.5% of the company will lose its line of work thanks to “continued industry-wide linear declines,” which means fewer people watching actual television and going instead to streaming. This move was likely made all the more difficult to swallow by the fact that Paramount’s three co-CEOs sent the memo in question detailing the cuts.

Those let go this time around will be pretty much America-based, reports note, though more layoffs may be yet to come for foreign staff. And with major bills potentially coming due—particularly if the merger with Skydance fails to go through after all—and Paramount down an ad agency, it is clear that something has to give at some point. Paramount has been frantically cutting for months now, and if the merger does not go through, it will be slashed to the bone with very little support left.

And the CFO Left…for Roblox

As seems to be so often the case for Paramount, the news got worse, as its CFO, Naveen Chopra, is on his way out to instead be CFO over at Roblox (RBLX). Taking over as interim CFO at Paramount will be Andrew Warren, former CFO of Discovery Communications and now strategic adviser to the office of the CEO.

Perhaps the one thing that was missing from all this was reason why Chopra would depart one CFO slot for another. Speculation, of course, might suggest he feared being next in the firing line, replaced by someone from Skydance or perhaps just cut if the “nightmare scenario” at Paramount kicked in fully. Given that Roblox CEO and co-founder David Baszucki noted particular satisfaction with Chopra’s “engineering foundation,” it may simply have been that Chopra wanted to get back to his roots.

Is Paramount Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, eight Holds and five Sells assigned in the past three months, as indicated by the graphic below. After an 8.7% rally in its share price over the past year, the average PARA price target of $12.08 per share implies 0.94% downside risk.

See more PARA analyst ratings

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