PARAA - Paramount Global: Downgrading Amid A Complex Skydance Merger

2024-07-17 04:58:36 ET

Summary

• Paramount stock previously had a strong buy rating due to upcoming profitability milestones in streaming, cash cow linear business, and undervalued assets.
• Recent events, including a complex merger with Skydance and lack of CEO, have led to a downgrade to hold.
• Skydance and Paramount merger deal details include significant dilution for existing shareholders, but potential for new leadership to drive value creation.

Investment Thesis

I previously wrote an article about Paramount (PARA) (PARAA) and had a strong buy rating on this stock because its streaming service is reaching profitability milestones very soon, its linear business is a cash cow business, and its assets are significantly undervalued. However, we are now downgrading this stock to hold because paramount is currently running without a CEO and pending a complex merger deal with Skydance that will dilute existing shareholders by 50%....

For further details see: