It probably should have been better news than it turned out to be. Entertainment giant Paramount Skydance (PSKY) just got approval from Warner Bros. Discovery (WBD) shareholders to conduct the merger between the two. Now all that remains is regulatory approval. Investors, however, seemed oddly terrified by this development, and tossed out Paramount shares at a frightening clip. Paramount stock was down over 5.5% in Thursday afternoon’s trading.
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The vote from Warner shareholders was clearly on the merger’s side, reports note, as the shareholders “overwhelmingly” approved the measure in a vote described as “anticlimactic” in nature. It was still a vital step toward making the deal actually happen, however.
Now all that remains is regulatory approval. Word from Paramount, however, is that the approval is fairly likely to happen. In fact, Paramount expects the deal to be completed before September ends. This is not stopping “block the merger” protesters, though, who set up a complete protest outside Warner headquarters earlier today. Meanwhile, lobbying efforts are under way, and blue states’ attorneys general are getting calls entreating them to stop the merger over antitrust grounds.
The Implications are Staggering
Meanwhile, some are starting to look more fully at what the future could look like under Paramount’s control. A host of properties would wind up under Paramount’s control, including not only CNN, but also the Harry Potter line. It remains to be seen how well Paramount would take some of the proposed changes to that universe, like Severus Snape’s casting, for example.
But the changes get more pronounced from there. Warner, after all, has the DC Universe under its banner, which represents a massive set of characters in and of itself. Moreover, there is also the matter of HBO MAX combining with Paramount+ and representing a clear competitor to Netflix (NFLX), the largest streamer in the field.
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 3.24% rally in its share price over the past year, the average PSKY price target of $11.38 per share implies 1.7% downside risk.
