We’ve known there was discontent regarding the merger between media giant Paramount Global (PARA) and Skydance for some time. But it might be even wider-reaching and active than we thought. New reports are wondering how close investor Mario Gabelli is to firing up a full-on lawsuit. While previously suggesting that he wasn’t necessarily planning to go that far, he might well choose to. Some reports refer to him as a “mercurial billionaire,” which means he certainly has the resources to pursue a lawsuit and may have the temperament for it.
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Meanwhile, securities lawyers around Gabelli seem pretty convinced that he’s ready to pull the trigger, having grown “…increasingly angry over the secret nature of the deal negotiations, how the terms of the deal were hatched without input from investors like him.” Yet, Gabelli seemed disinclined previously, noting that he “…just want(s) full disclosure…”
Nevertheless, the idea of a lawsuit is doing Paramount shares no favors in trading, as they’re down fractionally in Friday afternoon’s session.
Content on a Shoestring Budget
Recent content moves at Paramount seem to suggest that the company’s plans to reduce costs might be taking shape. Paramount+ just canceled “Halo” after two seasons. Though the producers are currently shopping around for a replacement venue, the fight may be unexpectedly finished for the somewhat mixed-reviewed production.
But Paramount has not forgotten the lessons of the past – horror movies are often cheap and come with a built-in audience. That explains why Paramount recently made a deal with 18hz Productions for “…several mid-budget horror films for Paramount Pictures per year.” Currently under process are “Primate” and new arrival “Familiar,” about a single mother who “…inadvertently invites an evil entity into her home.”
Is Paramount a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 26.09% loss in its share price over the past year, the average PARA price target of $12 per share implies 3.81% upside potential.
