Paramount rebounds after Super Bowl, but future is uncertain
The Kansas City Chiefs may have won the Super Bowl on Sunday, but one of the biggest winners off the field was: paramount global (NASDAQ:PARA).
The company owns CBS, the network that broadcasts the Super Bowl, and reportedly generated more than $600 million in advertising revenue from the marquee game, topping the Fox network in revenue last year. Additionally, the show has received tremendous exposure through the network and Paramount+ streaming platform.
Shares of Paramount Global soared the day after the Super Bowl, rising about 4% on Monday to trade at about $13.41 per share. However, it’s still down about 10% as of now, and with so much news and rumors swirling around the company, it’s unclear where this will go.
Talk of mergers and acquisitions (M&A) is swirling.
Paramount Global has struggled over the past few years, with its stock down 41% in 2022, 10% last year, and 10% so far this year. In recent months, the company has been the subject of rumors and speculation about its future. In December, Paramount Global announced that Warner Bros. It has been widely reported that the company is in discussions about a possible merger with Discovery (NASDAQ:WBD).
In January, there were reports on CNBC and elsewhere that film and TV studio company Skydance Media was interested in acquiring National Amusements, a holding company that owns a majority stake in Paramount Global. According to the report, the idea is to merge Paramount with Skydance and take it private in the process. Skydance has worked with Paramount in recent years to co-produce and distribute several films, including blockbusters such as: Top Gun: Maverick and Mission Impossible – Dead Reckoning Part 1.
More recently, media mogul Byron Allen made a bid to acquire Paramount Global in late January through his Allen Media Group, which owns The Weather Channel and more than 20 TV stations.
“Mr. Byron Allen has submitted a bid to purchase all outstanding shares of Paramount Global on behalf of Allen Media Group and its strategic partners,” Allen Media executives said in a statement confirming their interest. “We believe that this $30 billion offer, which includes equity, is the best solution for all Paramount Global shareholders, and this bid should be taken seriously and pursued.”
On February 1, Reuters reported that Allen was interested in Paramount’s TV stations and networks and would sell its film division, although this has not yet been confirmed.
So even if there’s a lot of smoke, it doesn’t necessarily mean anything will happen in terms of M&A, but it’s definitely worth watching.
What are your future plans?
At the Super Bowl in Las Vegas last week, Paramount Global CEO Bob Bakish told Yahoo Finance that the focus is on creating shareholder value.
“The most predictable way is through execution, which is why we are focused on execution, including maximizing value this weekend at the Super Bowl here in Las Vegas at Paramount Global,” he said. Yahoo Finance.
But Paramount’s CEO acknowledged that the company is also exploring other ways to create shareholder value, potentially including transactions. “We will have to see what happens in this regard,” he said.
Paramount isn’t scheduled to report fourth-quarter earnings until February 28, so investors will know more about its direction then. But until there is more visibility into Paramount’s future, investors should be extremely cautious. Even if Paramount had a big win on Monday.
