Paramount Skydance (PSKY) stock jumped close to 4% on Wednesday, finishing near a gain of 4.7% at one point, as two separate developments gave investors reason for optimism around the company’s planned $110 billion acquisition of Warner Bros. Discovery (WBD).
Paramount Skydance Corporation Class B Common Stock, PSKY
The stock has still lost nearly 30% over the past year, so any positive news tends to move the needle fast.
The first spark came from New Jersey, where a group of Democratic politicians penned an op-ed in the New Jersey Globe urging their state’s Attorney General, Jennifer Davenport, to exit the multi-state lawsuit. The signatories included the mayor of Bayonne, three state senators, and six state Assembly members.
Their argument was straightforward: New Jersey has invested years building a film and television industry, and Paramount has been part of that effort. Joining a lawsuit that the federal government already settled after eight months of investigation, they argued, was not a good use of taxpayer money.
The second catalyst came from a court filing by Judge Araceli Martinez-Olguin, who referred the case to Magistrate Judge Thomas S. Hixson for a settlement conference. Traders briefly sent Warner Bros. Discovery (WBD) stock higher on hopes this signaled a settlement was coming.
But the California AG’s office was quick to pump the brakes. In an email to Seeking Alpha, a spokesperson said: “This order does not indicate a settlement is in progress. The court specifically asked us to identify magistrate judges for a settlement conference in a previous scheduling order. This is a standard course in a case of this magnitude.”
California AG Rob Bonta had also canceled a meeting with Paramount representatives that had been scheduled for the previous Monday.
Despite that, Bonta told CNBC last week that a settlement is “very possible,” adding that his office remains “ready, willing, and able” to talk, while accusing Paramount of leaking information during confidential discussions.
On a separate front, Paramount announced a licensing deal with High View, a German streaming media company, to launch new free ad-supported streaming (FAST) channels.
Two channels are already live: one dedicated entirely to Beverly Hills 90210 and another for Lucky Dog. A Gunsmoke channel is set to follow.
The content will be available on Samsung (SSNLF) TV Plus, with High View subsidiary Goldvertise handling ad sales.
Wall Street currently has a Hold consensus on PSKY stock, based on two Buys, five Holds, and three Sells over the past three months. The average price target sits at $10.50 per share, implying about 4% upside from current levels.
Bonta’s office confirmed it has not entered formal settlement discussions with Paramount as of Wednesday.
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