David Ellison’s freshly formed Skydance Corp. is off to a rocky start on Wall Street.
\n\nHe won Warner Bros. Discovery after a yearlong battle. But investors, at this point, appear to believe he wildly overpaid for the deal — that the newly merged company, dubbed Skydance Corp., is worth nowhere near the $78 billion in cash Paramount shelled out for WBD.
\n\nAs of Oct. 5, the last day of trading for WBD and Paramount Skydance (PSKY) on Nasdaq, Warner Bros. Discovery had a market capitalization of $77.7 billion and Paramount was around $11 billion. Today, Skydance has a market cap of under $40 billion — less than half the predecessor companies’ combined value.
\n\nOn Wednesday, Skydance’s stock plunged 22%. That came after the company distributed about 471 million warrants giving holders of Paramount Skydance’s PSKY Class B shares the option to purchase stock in the new company for $12/share.
\n\nWhat happened? On Tuesday after the market close, the New York Stock Exchange made a technical adjustment to Skydance’s share price, reducing it by 19.4 cents, to account for the issuance of the warrants (trading on NYSE as “SKYD.WS”). The speculation is that index funds sold off the warrants they held…
Original source: https://variety.com/v/tv/