What Happened?
Shares of multinational media and entertainment corporation Paramount (NASDAQ: PSKY) jumped 3.8% in the afternoon session after the company amended its $30 per share all-cash offer for Warner Bros. Discovery, with Oracle co-founder Larry Ellison adding a personal guarantee for a major portion of the deal's financing.
The key change in the bid was Ellison's agreement to provide an irrevocable personal guarantee of $40.4 billion for the equity financing. This move addressed concerns Warner Bros. Discovery had previously stated about the certainty of the offer. By having one of the world's wealthiest individuals personally backstop a large part of the funding, Paramount increased the credibility of its takeover attempt. The market reacted positively to the news, as the guarantee appeared to reduce a key obstacle in the potential acquisition.
After the initial pop the shares cooled down to $13.53, up 3.7% from previous close.
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What Is The Market Telling Us
Paramount’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 4.3% on the news that Warner Bros. Discovery's board of directors formally rejected the company's unsolicited takeover offer, and a key financial backer pulled out of the deal.
The Warner Bros. board unanimously urged its shareholders to reject Paramount's $30 per share all-cash bid, recommending a rival offer from Netflix instead. In a statement, the board called Paramount's offer "inadequate, with significant risks and costs imposed on our shareholders."
Adding to the pressure on Paramount, Affinity Partners, an investment firm that had planned to help finance the deal, announced it was withdrawing its support. This news followed a previous trading session where analysts had already issued “Sell” ratings, citing concerns over Paramount's valuation and existing debt levels. Despite the setbacks, Paramount affirmed its commitment to acquiring Warner Bros. Discovery.
Paramount is up 27.8% since the beginning of the year, but at $13.53 per share, it is still trading 31.4% below its 52-week high of $19.73 from September 2025. Investors who bought $1,000 worth of Paramount’s shares 5 years ago would now be looking at an investment worth $387.68.
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