PSKY Stock Rises Premarket Today: Saudi Arabia's PIF May Put $10B Into WBD Deal

• In February, Paramount agreed to buy Warner Bros Discovery in a $110 billion deal, with an equity value of $81 billion.
• On April 2, Wells Fargo Cur price target on PSKY to $8 from $10.
• Retail sentiment for PSKY on the Stocktwits platform remained in the ‘bearish’ territory amid ‘low’ message volumes.

Paramount Skydance (PSKY) shares ticked up 0.2% in premarket trading on Monday after reports citing people familiar with the matter said that the media and entertainment company is in talks with three sovereign wealth funds led by Saudi Arabia for equity commitments of almost $24 billion, with Saudi Arabia's Public Investment Fund intending to provide $10 billion.

Shares of the media and entertainment giant added over 8% last week, breaking four consecutive weeks in the red.

The negotiations for funds, expected to close Monday, come after PSKY’s agreement in February to acquire Warner Bros. Discovery (WBD) in an $110 billion deal. PSKY had reportedly confirmed that its acquisition of WBD will leave the newly formed company with an estimated $79 billion in net debt. 

PSKY had clinched the deal to acquire WBD’s shares at $31 per share in cash, after Netflix Inc. (NFLX) declined to increase its earlier bid of $27.75 per share. The merged company is expected to produce at least 30 theatrical films annually. Still, some commentators have questioned whether the deal, now carrying a higher price tag and a heavier debt load, is truly in Paramount’s best long-term interest.

Analyst Says Paramount Needs Post-Deal Execution

Last week, Wells Fargo maintained an ‘overweight’ rating on PSKY but cut its price target to $8 from $10, representing a 16% downside from the company’s last closing price. Wells Fargo said that PSKY’s high pro forma leverage is a risk and that the company needs to get into “post-deal execution” to ease fears.

 According to Koyfin data, analysts' price targets for Paramount Skydance range from $10 to $20, with a 12-month average price target of $13.07, representing a 37% upside from last close. Consensus rating leans towards ‘hold’, with two analysts assigning a ‘Buy’ rating, eleven a ‘Hold’, five a ‘Sell’, two a 'Strong Sell’, based on coverage from twenty analysts.

How Do Retail Traders Feel About Paramount

On Stocktwits, sentiment around PSKY remained at the ‘bearish’ territory one day ago, amid ‘low’ message volumes.

One bullish user said “$PSKY This has serious potential in the next few years. Perfect for paramount and WB.”

Another user added “$PSKY the WBD merger has converted PSKY into an event-driven trading stock at this time:

Year-to-date, PSKY stock has tumbled 30%, while WBD’s stock has dipped about 5% but is up a whopping 171% over the past 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Barrick Mining Stock Slips: Pakistan Copper-Gold Project On Slow Burn Over Security Concerns