Paramount Global’s (NASDAQ:PARA) Board of Directors approved the merger agreement with Skydance Media on Monday. Following the approval, Skydance Media’s CEO, David Ellison, laid out a vision for the company, even as Paramount faces intense competition in the streaming industry.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Skydance’s Vision for Paramount
According to a Reuters report, during an hour-long presentation, Ellison outlined a vision for the company. Skydance’s CEO stated that the merger of Skydance and Paramount aims to better position the company in the evolving market.
Ellison plans to enhance the Paramount+ streaming service with improved algorithmic recommendations and advanced advertising technology. The CEO aims to improve the algorithmic recommendations for Paramount+ so that more subscribers spend more time on the streaming service, thereby reducing cancellations.
Skydance Intends to Use AI
The merged company also intends to use artificial intelligence to boost content creation efficiency and streamline operations. Ellison added that Skydance has already established a cloud-based animation studio in partnership with Oracle (NYSE:ORCL). In fact, Skydance used this ‘studio in the cloud’ to produce part of Spellbound, an animated movie slated for release on Netflix (NASDAQ:NFLX) later this year. Ellison aims to expand this technology across all production workflows and animation processes.
It’s important to note that Skydance CEO David Ellison is the son of Oracle co-founder Larry Ellison. Even Jeff Shell, the former NBCUniversal CEO likely to join the newly merged company as President, told Reuters that Ellison possesses a unique blend of creative and technical skills crucial for navigating technological changes in the entertainment industry.
Is Paramount a Buy or Sell?
While Paramount stock has recovered somewhat over the past week, it remains down more than 20% year-to-date. The uncertainty surrounding the transaction until now and concerns about Paramount’s long-term viability as a standalone entity have weighed on the stock.
Wall Street remains cautious about Paramount’s prospects. The stock has a Moderate Sell consensus rating based on two Buys, five Holds, and nine Sell recommendations. The analyst’s average PARA price target is $11.68, implying an upside potential of 4.5% from current levels.
