Paramount Stock (NASDAQ:PARA)
Following more analyst optimism on a strategic investment into its primary owner, the price of Paramount Global stock (NASDAQ:PARA) (NASDAQ:PARAA) is pushing another robust rise forward.
After Wolfe Research upgraded the firm to Peer Perform from Underperform, Paramount stock was up 4.6% at lunchtime. This was the company’s second consecutive day that was on pace to gain more than 4% after Thursday’s $125 million cash injection.
To arrive at its Underperform rating, the company relied on two key assumptions, which it stated as follows: “(1) Paramount would struggle to become sufficiently profitable in streaming to support a higher stock price and (2) Paramount would struggle to sell its largest assets — CBS and its cable networks — at prices that would satisfy Shari Redstone.”
According to the company’s statement, “so far, so good” on their profitability assumption.
But then, the holding company owned by the Redstone family, National Amusements, announced that it had received a $125 million margin loan from the merchant bank owned by Byron Trott, often known as Warren Buffett’s banker. According to Wolfe, the collateral for the loan is a significant portion of NAI’s 9.7 percent ownership position in Paramount.
According to the statement made by the company, “Given that the Redstones’ financial situation appears to be even more pressing, we highly doubt that Shari Redstone’s commitment to Paramount’s current money-losing strategies would be so great as to lead her towards surrendering those shares.” As a result, we anticipate that she will become more amenable to negotiating the prices at which she will sell assets, both major and small.
On Friday, Loop Capital also raised its recommendation for the company from Sell to Hold, stating that the Paramount stock potential downside is no longer significantly larger than its potential gain.
Featured Image: Unsplash @ hannahwernecke
Author Shariq Khan 
