PARA - Paramount: A Story Of Sharks And Tunas

2024-01-28 02:59:03 ET

Summary

• Some kind of merger involving Paramount seems a done deal, but the devil will be in the details.
• There are several potential outcomes which would not result in an immediate pay-off for Paramount shareholders.
• In this article, I will examine the most likely scenarios and the potential pitfalls to look out for.

Sharks Are Circling

Within a few weeks after a widely shared John Malone interview that basically depicted the company for almost dead, several suitors have emerged for Paramount ( PARA ) ( PARAA ) ( PARAP ) in short order: private equity investor Apollo Global Management ( APO ), competitor Warner Bros. Discovery ( WBD ) and David Ellison’s movie production company Skydance . Other frequently mentioned potential buyers include Comcast ( CMCSA ) and Apple ( AAPL ), in addition to all those that may just be interested in pieces of Paramount’s media empire.

With all this M&A chatter involving a highly shorted stock ( short interest 12%, almost six days to cover), at first sight it is surprising to see the company’s stocks move relatively little....

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