The Skydance / Paramount (PARA) merger might be under more fire than we expected, especially as a new administration is just days from inauguration. In fact, the Center for American Rights has just called on the incoming Federal Communications Commission (FCC) to re-evaluate the merger between the two thanks to Skydance’s connection to Chinese firm Tencent (TCEHY) . This did Paramount no favors, and shares dropped nearly 2% in the closing minutes of Thursday’s trading.
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A report from The Wrap noted that the Center for American Rights was looking for the FCC to consult with the Committee on Foreign Investment in the United States (CFIUS), or a similar national security operation, to better understand the connection between Skydance and Tencent. This is especially true given that Tencent was designated a “Chinese military company” by the Department of Defense.
For their part, Paramount and Skydance noted that any concerns about Chinese influence would have “…no factual foundation…” and further, were “…legally unavailing.” Moreover, Tencent had very little to do with Skydance’s operation, as it had “…entirely passive, non-attributable, minority interests…” that “…present no basis for concern about undue influence.” But with the House China Select Committee chair John Moolenaar noting that “…rampant self-censorship” runs through Hollywood to curry favor with the Chinese, there may be more going on than expected.
Troubles With Trek
Another report from Redshirts Always Die gave us a look at Star Trek in 2024, which should come as a surprise to few, with a name like “Redshirts Always Die.” But the idea here was that Trek did not have a great year in 2024. Which is fair; two series—Star Trek: Discovery and Star Trek: Lower Decks—both came to an end, and only one, Star Trek: Strange New Worlds, was left to carry on.
But throw in the loss of the Playmates Trek toy line, and Star Trek: Prodigy moving to Netflix (NFLX), along with a huge swath of firings, that ultimately led the Redshirt crew to assert that it was mainly Paramount’s internal struggles that left Trek on the back foot this year. There are hopes that will change this year, especially with Star Trek: Section 31, but concerns about the new series are already giving some pause about this tentpole franchise.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, seven Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 19.83% loss in its share price over the past year, the average PARA price target of $12.45 per share implies 22.06% upside potential.
