At the end of last week, we found that current Paramount (NASDAQ:PARA) CEO Bob Bakish may be on borrowed time. The latest reports suggest that the amount of borrowed time may be short, as he might well be resigning before the close of business today. Investors were oddly enthusiastic and sent shares of the media company up over 3% in Monday afternoon’s trading as a result.
The “Office of the CEO” concept looks to be taking shape at Paramount, as Bakish is poised for removal ahead of an increasingly likely merger with Skydance Media. Bakish’s departure is prompting new questions about Paramount’s ability to remain a company on its own as Paramount fundamentally shakes up its operations.
A growing body of shareholders, meanwhile, are actively opposed to the Skydance Media merger. With Byron Allen, as well as the Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO) coalition waiting in the wings for a shot that may never come, it’s easy to wonder how this will all boil down from here.
Pacifying the Resistance
Meanwhile, it’s become increasingly clear that Paramount will have to do something about that “growing body of shareholders,” and there may be one plan in the works. Reports suggest that David Ellison is planning to buy a bloc of Paramount shares at a premium in a bid to “..shore up the company’s finances.” If that bloc of shares comes from the Paramount shareholders who aren’t happy about a Skydance merger, meanwhile, that may kill two birds with one stone.
Is PARA a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 46.69% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 7.87% upside potential.
Is PARA the Right Stock to Buy for Passive Income?
Before you hurry to invest in PARA, think about the following:
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