Skydance Shares Slide Again as Wall Street Frets Over $80 Billion Debt

Skydance shares fell for a second straight session Wednesday, closing down 6.8% at $8.98 as investors weighed the debt carried by the newly merged Paramount and Warner Bros. Discovery. The drop followed a 2.7% slide Tuesday, when the stock debuted on the New York Stock Exchange under the ticker SKYD and closed at $9.51. It swung between a 6% loss and a brief gain that day, peaking at $9.84. The $110 billion merger closed Tuesday morning, hours before trading opened.

The deal cleared a path that litigation had obstructed for weeks. Twelve states led by California, along with the Writers Guild of America, sued on antitrust grounds. The company settled with the states two weeks ago, agreeing to spend at least $1.5 billion on US film production over five years and to create a board that safeguards the editorial independence of CNN and CBS.

Investors now focus on the balance sheet. The combined company starts with about $80 billion in debt and a leverage ratio near seven times EBITDA. Fitch cut its credit rating Tuesday, citing the borrowing, pressure on linear revenue, streaming competition and the unpredictability of hit-driven content. Financing for the acquisition included $41.4 billion in senior secured notes and an $8.5 billion term loan.

Chairman and CEO David Ellison and co-CEO Ynon Kreiz told reporters Tuesday they will cut leverage sharply by 2028 and can spend on content while saving money. They have promised $6 billion in cost synergies, $3 billion in each of 2027 and 2028.

Analysts remain split on the timetable. Matthew Condon of Citizens called the stock “a show me story,” yet rates it market overperform with a $14 price target, arguing the low share price makes the risk-reward attractive. Doug Creutz of TD Cowen holds a neutral rating and warned that integration and execution problems have tripped other large media mergers. He also pointed to supply. The Ellisons and other financiers behind the deal may eventually sell shares, which gives buyers little reason to hurry.

Raymond James expects choppy trading, citing overlapping streaming subscribers, though it said Kreiz brings experienced operational leadership. Investors get their next formal update when the company reports third-quarter earnings.

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