Investors Can Wait to Buy Shares of Paramount Skydance

By: Shannon Kane

Investors can wait to buy shares of Paramount Skydance (NASDAQ: PSKY) due to the need for regulatory approval and surmounting risks tied to acceptance of its bid to acquire Warner Brothers Discovery (NASDAQ:WBD).

The near-term outlook for the acquirer is “clouded by uncertainty and integration complexity,” according to Bank of America (BoA) Global Research. Even though the long-term strategic potential is significant for Paramount, the imminent hurdles led BofA to recommend investors not to purchase the shares.

The investment firm recently lowered its price objective on the media company to $11 from $13. But the merger, if it is approved by regulators in the coming months, will create one of the largest media companies in the industry.

Investors Can Wait to Buy Shares of Paramount Skydance: Uncertainty

Due to the uncertainty, investors may prefer to research diligently and take many factors into account. The combined entity is intended to bring together major studios, extensive intellectual property (IP) such as Star Trek, DC Comics and Harry Potter, as well as a large linear network footprint that includes CBS, CNN, TNT and Nickelodeon, BofA wrote.

PSKY highlighted several integration priorities, from consolidating streaming technology stacks to modernizing advertising capabilities. But Paramount is already deep in debt amid its absorption of the Paramount/Skydance merger.

Paramount recently won a bidding war that began in early December 2025, beating out   Netflix (NASDAQ:NFLX) to acquire Warner Brothers Discovery. Netflix seemed poised to unite with Warner Brothers Discovery but Paramount persisted and ultimately prevailed.

Netflix announced in mid-January 2026 that it would pay a total enterprise value of approximately $82.7 billion (an equity value of $72 billion) entirely in cash for the transaction, with shares valued at around $27.75 each. In response, Paramount Skydance offered an all-cash deal valued at $30 per share.

It was Paramount’s willingness to purchase the entire Warner Brothers Discovery company, including the cable television networks that many perceive as dying, that persuaded WBD executives to agree to a sweetened of $31 per share. The outcome became clear on Feb. 26, when Netflix CEO Ted Sarandos said he saw no reason to delay the process if he knew he was not going to raise his offer and pulled out of the bidding war, leaving a clear path for Paramount to acquire Warner Brothers. Paramount and Warner Brothers Discovery agreed to a $110 billion total takeover deal.

Investors Can Wait to Buy Shares of Paramount Skydance: Warner Brothers Discovery

Paramount will gain ownership of the entire Warner Brothers Discovery company.  Beyond streaming and intellectual property, the buyer gained access to networks like CNN and Discovery Channel.

Netflix, on the other hand, sought to acquire just Warner Brothers’ film and television studios and streaming services, HBO MAX and HBO.

So, now it is clear that Warner Brothers Discovery will be purchased by Paramount Skydance. This increased offer is just the latest in a series of moves by Paramount CEO David Ellison to win the bidding war.

Media experts and Paramount executives alike expect that a deal with Paramount is likely to garner less government scrutiny than one with Netflix. David Ellison’s father, Larry Ellison, is the founder of Oracle (NYSE: ORCL), a tech firm, and is known to have close relations with President Trump. Both Ellisons have spent time on Capitol Hill in recent months, lobbying for the merger.

However, lawmakers on both sides of the political aisle have raised concerns that any deal to acquire Warner Brothers could result in fewer choices and higher prices for consumers. Paramount has promised to make 30 theatrical film releases a year. That total would be the most of any studio by a wide margin and increase Paramount’s streaming output as well. Yet Paramount will try to do this while servicing more than $78 billion in debt.

This looks like a potential red flag for investors — a debt ratio of nearly seven times Paramount’s annual earnings, analysts said. Paramount has pledged to cut its debt-to-earnings ratio to 4.4 times earnings, which means it must find billions of dollars of cost savings from the merger.

Shares of PSKY surged 24% the day after news of the acquisition broke but have since declined to new 52-week lows and are now closing around the $9 range.

The WBD purchase is backed up (to an unprecedented degree) by Larry Ellison’s personal fortune, which he earned by co-founding software giant Oracle in 1997. If the newly enlarged Paramount Skydance struggles to maintain enough cash flow to support operations, Larry Ellison will be responsible for funding the media conglomerate.

If completed, the Paramount transaction will mark the third time that Warner Brothers, HBO, CNN, TNT and other channels have been sold to new owners just since 2018, when AT&T (NYSE: T) bought Time Warner after winning an antitrust trial during the first Trump administration. The employees of all these companies have already endured multiple periods of discomfort and transition while legal and regulatory processes ensued. Layoffs are a concern, and they are expected.

For now, the Justice Department will investigate whether this deal violates antitrust laws. Expect updates in the coming months, as this is a major public transaction with many elements in flux. Investors should read any registration statements provided on the subject.

Shannon Kane is a staff writer with www.stockinvestor.com.