How should Parastock be played as the FCC approves the Paramount ski dance merger?
Paramount (PARA) has secured its long-awaited approval from the Federal Communications Commission (FCC) with its $8 billion merger with SkyDance Media.
The aforementioned merger will place Paramount Assets, which includes CBS under the company led by David Ellison, and will close in early August.
Paramount Stock initially appeared in the news, but on Friday it turned its profits back to a 1.6% drop. However, at the time of writing, it has risen by about 30% since the beginning of the year.
The Skydance merger will prove to be meaningful positive for Para stocks as buyers inject $1.5 billion in fresh capital to reduce their debt.
It also offers $4.5 billion payments to Paramount shareholders, essentially increasing liquidity and overall investor confidence.
The $8 billion deal integrates high-value assets including Paramount Pictures under CBS, Paramount+ and Tech-savvy leadership, promising streaming profitability and artificial intelligence (AI)-driven content innovation.
Overall, it places the most important stocks for the long-term growth of a competitive media environment.
Operational efficiency is another important reason why the aforementioned mergers are constructive for Paramount Share.
Skydance and Bain & Co. has identified approximately $2 billion in annual cost savings, half of which will be implemented in the first year.
That said, Moffettnathanson analyst Robert Fishman recommends that investors stay on the sidelines as the Skydance-Paramount combination entities still have a lot to prove.
“Now, Skydance’s leadership will take control, and the actual work will begin and rebuild Paramount,” he told clients in a research note on Friday.
Fishman maintains a “hold” rating for Para stock, achieving its $10 price target, showing a potential downside of 23% from its current level.
Despite how SkyDance merger and how it will help Paramount Stock in the second half of 2025, other Wall Street analysts recommend avoiding media companies.
The consensus rating for PARA stocks is currently on “medium selling”, with an average price target of around $11.67, indicating a potential downside of around 10% from here.