I was just about to start writing a depressing article about how Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO) had gone quiet and taken media company Paramount’s (NASDAQ:PARA) market cap into hiding with them. But Paramount shares were up nearly 3% in Thursday afternoon’s trading, all because of a last-minute return of Skydance, who brought a sweetened pot back with it.
It’s a twist worthy of the best in Hollywood fare, as David Ellison et al. came back with a new offer designed to overcome some of the objections that the Class B stockholders had to its original offer to buy Paramount. The original plan called for Ellison to buy out basically only Shari Redstone and seize controlling interest that way. Shareholders, naturally, staged an open revolt, and so Skydance offered to buy out some of the other upper-crust shareholders, too.
That quieted down the fervor, but only from as many people as would be getting checks. A great many unbought, meanwhile, remained, and they were not happy. But Skydance appears to be fixing that problem, and opening its heart and its checkbook to the legions of Class B shareholders involved, though specifics weren’t mentioned.
Just In Time for Sony and Apollo to Go Dark
My original article on this topic, before Skydance’s truly Hollywood swoop-in, would have focused on why Sony was going quiet. Indeed, neither Sony nor Apollo have made much mention of the deal after their non-disclosure agreements, just recently signed. And, word from Sony Pictures Entertainment CEO Tony Vinciquerra—when discussing the deal in a limited fashion—noted that Sony was really more interested in Paramount’s library than anything else.
It wasn’t planning to get into streaming at all, which is good, as Sony was previously involved in streaming back in 2018 when it bought Crackle. It then sold most of Crackle to Chicken Soup for the Soul Entertainment in March 2019.
What Is the Future of Paramount Stock?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, eight Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 20.53% loss in its share price over the past year, the average PARA price target of $12.27 per share implies 2.16% upside potential.
