PSKY Rises Premarket: Analyst Says Paramount’s Potential $2B Merger Delay Cost May Be ‘Minimal’

• Paramount Skydance and Warner Bros. Discovery have delayed their $110 billion merger until 2027.
• Morningstar analyst Matthew Dolgin said the merger delay creates a manageable financial impact for Paramount.
• He expects the legal process to move faster and believes the merger will likely proceed.

Paramount Skydance (PSKY) stock inched up premarket on Monday after three consecutive weeks of losses, though the stock remains on track for its worst monthly performance since March, as the company’s move to halt the Warner Bros. Discovery merger closing timeline could add about $2 billion in costs. 

PSKY-WBD Merger: Regulatory Fight Continues

Paramount Skydance and Warner Bros. Discovery have agreed to delay their $110 billion merger until June 1, 2027, or until a court makes a final decision on an antitrust lawsuit challenging the deal.

The delay comes after California Attorney General Rob Bonta and 11 other state attorneys general sued to stop the merger, arguing that combining two major Hollywood companies could reduce competition, increase costs for consumers, and hurt the film, cable and streaming industries.

Paramount Skydance said it remains confident in the merger and believes the court process will show the benefits of the deal. However, the legal battle creates additional uncertainty and could increase costs and delays. Paramount Skydance stock inched 0.1% higher in Monday’s premarket. 

Paramount’s $2 Billion Delay Cost Seen As Manageable By Analyst 

Morningstar analyst Matthew Dolgin said the agreement comes after regulators approved the deal in most required jurisdictions, while a court dispute led by California continues to create obstacles.

Delay carries a cost because Paramount could face an additional payment estimated at roughly $2 billion if the merger does not close until the extended deadline. Dolgin said the added expense stems from a daily “ticking” fee that begins accumulating in October, though he views the amount as relatively small compared with the overall value of the transaction.

Court strategy shifts as according to the analyst, Paramount’s decision may help ramp up the legal process and improve its position with the judge overseeing the case. The agreement does not guarantee that the court will allow the merger to proceed, but the analyst expects a trial could happen during the first half of 2027 if both sides fail to reach a settlement.

Dolgin remains confident that the combination will eventually close, maintaining price targets of $20 for Paramount and $28 for Warner Bros. Discovery. He believes the delay has a “minimal” impact on Paramount, while Warner Bros. Discovery could offset the effects of waiting through the merger-related payment structure.

What PSKY Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory with 190% increase in message volume over the last week. 

A user said, “I don't think the deal will take till 2027 to finish. As been said before "everyone" who maters above the state govt lawyers have already green lit the deal. The longer the case drags the more the govt lawyers look like i*****.”

Another user said, “just think of all the people that will be fired and how many projects will be put on hold if the trial really went an entire year. We would have all the evidence we need in real time.”

A third user said, “Something has to give, continuing to short at this level can be a huge mistake, not sure how much longer Ellison will tolerate this abuse!!”

So far this year, while PSKY stock has cratered 38%, WBD stock has dropped 10%. 

Also See: UAL, DAL, AAL Stocks In Focus: United Airlines’ Mega Merger Hunt Reportedly Took Aim At Delta Before American

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