What Happened?
Shares of multinational media and entertainment corporation Paramount (NASDAQ: PSKY) fell 2.4% in the afternoon session after several analysts issued “Sell” ratings amid concerns about the company's valuation following its hostile bid for Warner Bros. Discovery.
The ratings followed Paramount's move to acquire Warner Bros. Discovery for $30 per share in cash, countering a previously announced deal between Warner Bros. and Netflix. Analysts expressed wariness about Paramount's financial position. For instance, Morgan Stanley noted the company's nearly $30 billion enterprise value seemed excessive and was likely inflated by speculation around the deal. The firm also flagged Paramount's $15.5 billion in debt and a negative diluted earnings per share over the previous year. The stock's decline reflected these valuation worries tied to the company's standalone prospects and the potential acquisition.
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What Is The Market Telling Us
Paramount’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 2.9% on the news that investors took profits following the stock's 9% rally in the previous session, which was fueled by the company's hostile takeover bid for Warner Bros.
Discovery (WBD). Paramount had launched an all-cash offer of $30 per share, valuing Warner Bros. at approximately $108.4 billion. The move was an attempt to outbid an earlier agreement between Warner Bros. and Netflix. The initial news sent Paramount's shares soaring. However, the subsequent drop suggested the initial excitement cooled as investors considered the significant hurdles of a hostile takeover.
Paramount is up 29.9% since the beginning of the year, but at $13.74 per share, it is still trading 30.3% below its 52-week high of $19.73 from September 2025. Investors who bought $1,000 worth of Paramount’s shares 5 years ago would now be looking at an investment worth $382.84.
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