Paramount Stock Soars as Parent Company Potentially Up for Sale

Paramount stock continues to see positive gains in the Monday premarket following reports of a potential sale of its parent company.

According to a Monday note from Citi, Paramount, an entertainment company that encompasses a movie studio, television channels, and streaming services, could be valued at $38 with the sale of its assets. On Friday alone, Paramount saw a significant increase of 15%, with a further rise of 1.3% to $17.07 today.

Citi arrived at this valuation through a comprehensive assessment, breaking down Paramount into four key components: cable networks, broadcast network, production assets, and the direct-to-consumer business. Currently, Citi rates the shares as a Buy, accompanied by a price target of $19.

In recent talks reported by The New York Times, media mogul Shari Redstone, who controls National Amusements, is said to be negotiating the sale of a controlling stake to independent film studio Skydance. Publisher Puck and news platform Deadline were the first to report these discussions last Thursday. National Amusements presently owns 77% of Paramount's voting shares, as well as CBS and MTV. The report did not disclose the potential pricing or the certainty of a deal.

Requests for comment made outside of regular office hours have not received immediate responses from either Skydance or Paramount.

If successful, a sale of Paramount could lead to a reshuffling of ownership within the movie and television studio industry. Competitors including Comcast, the parent company of NBCUniversal, and Warner Bros. Discovery, which owns HBO and CNN, have also expressed interest in acquiring and divesting assets.

This potential sale reflects the mounting pressures faced by media companies due to declining revenue from cable TV and the growing prominence of streaming services.

Skydance is supported by RedBird Capital Partners, a private equity group. David Ellison, son of Oracle founder Larry Ellison, founded Skydance.