Why Paramount (PARA) Shares Are Falling Today

What Happened:

Shares of multinational media and entertainment corporation Paramount (NASDAQ:PARA) fell 6.3% in the pre-market session after reports that Edgar Bronfman Jr (media mogul) withdrew his bid (valued at $6 billion) to acquire the company. The bid was meant to challenge the offer from Skydance Media and suggest a potential bidding competition, which would have likely raised PARA's final sale price, won't happen.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Paramount? Access our full analysis report here, it’s free.

What is the market telling us:

Paramount’s shares are very volatile and over the last year have had 35 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 4 months ago, when the company gained 12.1% on the news that the New York Times reported that Sony Pictures and Apollo Global Management are in talks to acquire the company. According to the sources "The terms of the joint bid are still being worked out, and it's possible that Sony and Apollo may not make an offer for Paramount." Earlier, CNBC reported on April 11, 2024, that Skydance Media and its CEO, David Ellison, were meeting with Paramount's management over a potential merger.

Paramount is down 25.5% since the beginning of the year, and at $10.75 per share it is trading 36.2% below its 52-week high of $16.85 from December 2023. Investors who bought $1,000 worth of Paramount’s shares 5 years ago would now be looking at an investment worth $261.88.

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