Monday, December 11 at 7:23a – Paramount stock fell on this morning after jumping Friday on a report that its parent company may be sold.
Paramount, an entertainment company with a movie studio, television channels, and streaming services, could be worth $38 if assets are sold, said Citi in a note Monday. Paramount which jumped 12% on Friday, fell 3.4% to $16.24 when the market opened Monday.
Citi came to its conclusion with a sum-of-the-parts calculation. It breaks down Paramount into four pieces—cable networks, broadcast network, production assets, and the direct-to-consumer business. It currently rates the shares a Buy with a price target of $19.
Others saw the jump in shares on Friday as a chance to sell. Loop Capital downgraded its rating on Paramount to Sell from Hold with an unchanged price target of $12. The shares have lost about 18% over the past year.
Shari Redstone, the media mogul who controls National Amusements, is in talks to sell a controlling stake to independent film studio Skydance, the New York Times reported, citing people familiar with the talks. News outlets Puck and Deadline first reported the talks Thursday. National Amusements owns 77% of Paramount voting shares, as well as CBS and MTV. The talks may not lead to a deal and the pricing wasn’t revealed in the report.
Paramount declined to comment to Barron’s on Monday. Skydance didn’t immediately respond to a request for comment outside of normal office hours.
A Paramount sale could kick-start at shake-up of movie and television studios’ ownership. The talks come as competitors Comcast, which owns NBCUniversal, and Warner Bros. Discovery, the owner of HBO and CNN, have also signaled interest in acquisitions and selloffs.
It shows the pressure media companies have come under with declining revenue from cable TV and the rise of streaming services.
Skydance is backed by RedBird Capital Partners, a private equity group. It was founded by David Ellison, the son of Oracle founder Larry Ellison.
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