Paramount stock drops as Redstone ends talks to sell stake

Shares of Paramount Global (PARA) began to dip on Wednesday morning as controlling shareholder Shari Redstone has ended discussions to sell her stake in the company. National Amusements, which controls Paramount, reported it did not reach acceptable terms with Skydance Media.

Yahoo Finance anchors Brad Smith and Seana Smith break down the latest developments for Paramount and what they could mean for the company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video transcript

One company that we certainly do keep talking about that is paramount.

Let's update you because the shares are falling today after Sherry Redstone ended discussions to sell her stake in Paramount National Amusements, announcing that they have not been able to reach terms the Sky Dance Media for the potential transaction.

You're looking at a loss of just about 3% on, uh, in pre market action.

This update announced, uh, yesterday late afternoon.

So here you have Sherry Redstone here, walking away offering, and then this introduces even more uncertainty.

And as a result, we've seen analysts here a bit more negative on these names.

You got Wells Fargo downgrading here to underway.

They're they're citing some of these causes here for internal disruption, what exactly the path forward here means for a Paramount and ultimately, how a paramount can survive, at least in the streaming space with so many of those larger competitors.

And ultimately here we talk about not even surviving but really becoming a larger player and able to win some of that market share that they currently don't have.

Yeah, it sounds like, based on some reporting from Wall Street Journal, Redstone going to hope to sell National Amusements to a different company or suitor out there.

Whoever's stepping forward and throwing their hat in the ring and perhaps puts up a good price.

Um, but ultimately, Redstone has bucked at many of and all of the deals that have essentially come forward to this point in time Here, um, and given the amount of share and stake, uh, that she holds, that's why it makes it so difficult for this to go through.

She's been running the company since 2020.

Um, after, uh, her father passed.

And so who this eventually goes to and at what price is continuing to keep shareholders in limbo right now?

Um, but you gotta wonder for the consumer what type of difference they'll see in the service level, depending upon who the acquirer and the suitor is to buy up.

So buy up the assets here and ultimately, who would even be interested at this point here with with so much right, it's a purchase, and then an investment even more so because then you've got to figure out, OK, where are we going to either at certain parts of the business or, uh, start to trim some of the fat or, you know, do we need to spend further into making sure that this is actually getting to a level that it was mis that because of mismanagement?

Perhaps, Uh, and because of falling out of consumer favour.

So all those things considered and many of the, uh, large shareholders, some of the large shareholders that we've had on the programme here, uh, most recently over the last couple of months have been pushing for a sale.

They want some sort of a change here at Paramount.

So again, uh, interesting story here to continue to follow.