Paramount (PSKY) Stock Trades Down, Here Is Why

What Happened?

Shares of multinational media and entertainment corporation Paramount (NASDAQ:PARA) fell 4.1% in the afternoon session after continued weakness as reports surfaced that the newly merged company with Skydance is preparing for a significant wave of layoffs. 

The new Skydance-led Paramount is expected to cut between 2,000 and 3,000 positions around November as part of a cost-cutting initiative following its recent $8.4 billion merger. The move is part of a plan to achieve at least $2 billion in cost efficiencies. While the cuts will be company-wide, sources indicate CBS News and local stations are bracing for a particularly significant impact. The company's recent performance has been challenging, with revenue declining 2% annually over the last two years and earnings per share falling. Paramount President Jeff Shell stated the process would be a necessary, one-time event to stabilize the company for the future, adding, "We do not want to be a company that has layoffs every quarter.".

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What Is The Market Telling Us

Paramount’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock dropped 6.5% on the news that Needham advised investors to “move to the sidelines” due to uncertainty surrounding its upcoming merger with Skydance Media. 

The investment firm Needham reiterated its “Hold” rating, pointing to a lack of clarity on the company's ownership, leadership, and strategy following its merger with Skydance Media. This warning followed Paramount's mixed second-quarter results where revenues missed expectations. 

Adding to the negative sentiment, Wells Fargo & Company also lowered its price target on the stock from $12.00 to $10.00. The company's recent financial report highlighted underlying weakness, as its traditional TV division's revenue dropped and the Paramount+ streaming service lost subscribers.

Paramount is up 44.1% since the beginning of the year, and at $15.24 per share, it is trading close to its 52-week high of $16.03 from August 2025. Investors who bought $1,000 worth of Paramount’s shares 5 years ago would now be looking at an investment worth $546.46.

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