Skydance Shares Tumble 25% After Issuing 471 Million Stock Warrants to Paramount Investors
If all of the warrants were exercised at the initial $12 exercise price, it would raise $5.65 billion for the company The post Skydance Shares Tumble 25% After Issuing 471 Million Stock Warrants to Paramount Investors appeared first on TheWrap .
Skydance's shares dropped by 25% on Wednesday following the issuance of 471 million stock warrants to Paramount investors. The warrants enable holders to acquire Skydance's Class B stock after its merger with Warner Bros. Discovery. The deal, valued at $110 billion, includes about $5.65 billion in potential proceeds from warrant exercises.
The warrants come with terms similar to those of the combined company's equity investors, including top executives. Skydance is aiming to cut costs by $6 billion in the first three years post-merger and expects $10 billion in free cash flow by 2030. The company's leverage ratio is targeted at three times by 2029 through content investments and cost savings.
However, credit rating firm Fitch downgraded Skydance's rating due to higher leverage and integration risks, warning of potential asset sales or equity issuance to meet the target.
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