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Paramount Global shares fell after Warren Buffett’s Berkshire Hathaway reported it would cut its stake in the major studio by a third.
Paramount Global shares were trading down 36 cents, or nearly 3%, at $12.83 on the Nasdaq exchange at market open Thursday morning. That widened a slide in the studio’s stock late Wednesday, dropping about 6% to $13.19 in post-market trading.
Berkshire Hathaway sold 30.4 million shares of Paramount Global during the fourth quarter ending Dec. 31, 2023, according to a Bloomberg tally, in a securities filing late Wednesday. It was announced that.
The share sale coincided with market speculation that David Ellison’s Skydance Media and Redbird Capital were eyeing a potential bid to buy a controlling stake in Sheri Redstone’s conglomerate. Another media mogul, Byron Allen, also toyed with Paramount Global by unveiling a proposal to buy all of the studio’s outstanding stock for $14.3 billion.
If a deal with National Amusements or Paramount Global goes through, market analysts expect it to be a significant sale for Paramount Global, including Skydance and Paramount’s scale as content producers. This also includes the possibility of merging a filming entertainment studio to expand.
In such a speculative scenario, the future of the loss-making Paramount+ streaming platform is up in the air, with PlutoTV and some terrestrial TV channels potentially up for sale. Paramount’s stock also lost value into 2023 as streaming and pay-TV subscriber losses mounted, only recovering when the studio was talked about as a takeover target.
Warren Buffett is the studio’s largest outside investor, while Redstone effectively controls Paramount Global through its controlling stake in National Amusements and its multi-class stock structure.
Paramount will announce its fourth quarter and full-year 2023 results on February 28th.
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