Paramount Skydance (PSKY) stock surged 36.7% on August 13, reaching a new 52-week high of $17.53 following Jim Cramer’s meme stock comment. CNBC’s Mad Money host, Cramer, tweeted, “Paramount, (PSKY), is a meme stock!!!!!!!!!!!!!! Small float… shocking.” Although PSKY was already trending higher in early trading yesterday, Cramer’s comment was enough to set the stock soaring.
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However, shares are down 2.3% in pre-market trading at the time of writing, as investors likely booked profits following the sharp rally. Paramount completed its merger with Skydance Media on August 7, after which roughly 70% of the company’s outstanding shares became owned by Skydance. This implies that PSKY has a very small float (limited number of shares available for public trading), leading to the perception that yesterday’s rally was driven by speculative trading.
Why Did PSKY Stock Jump Yesterday?
Regardless of Cramer’s comments, there are a few other reasons for PSKY’s solid rally on Wednesday. Let’s briefly take a look at them.
- Paramount and Skydance recently completed their long-awaited $8.4 billion merger. The company’s shares began trading on Nasdaq under the ticker “PSKY.” The stock has exhibited characteristics of a “meme stock” surge, driven partly by retail investors and social media interest. This has led to unusually-high trading volumes and price spikes unrelated to fundamental changes.
- One of the major catalysts for the stock price surge was Paramount’s $7.7 billion, seven-year exclusive media rights deal to broadcast UFC (Ultimate Fighting Championship) events in the U.S. This high-profile deal has impressed both investors and analysts, contributing to the bullish sentiment on the stock.
- New CEO David Ellison has outlined an ambitious roadmap for the merged company, combining Skydance’s technological expertise with Paramount’s media strengths. He has vowed to increase film production and continue focusing on their cable networks, prioritizing well-known franchises such as Star Trek and Top Gun. The company will also redefine its core cable networks, including Nickelodeon, MTV, BET, and others.
Overall, the 36% jump in Paramount Skydance stock was driven by a mix of strategic business news and speculative investor bets, creating a “meme stock”-type rally.
Is PSKY Stock a Buy, Hold, or Sell?
Analysts currently prefer to remain sidelined on Paramount Skydance stock. On TipRanks, PSKY stock has a Hold consensus rating based on two Buys, nine Holds, and six Sell ratings. The average Paramount Skydance price target of $11.50 implies 23.3% downside potential from current levels. Year-to-date, PSKY stock has gained 44.7%.
