Paramount Courts Elon Musk For Investment As Stock Nears Multi-Year Lows

What Happened

Paramount Skydance has discussed bringing Elon Musk in as an equity investor, Semafor reported on Wednesday. Its stock, meanwhile, trades near its lowest levels in years.

Oracle founder Larry Ellison, David’s father, personally guaranteed more than $40 billion of that equity, Semafor reported. New investors would spread that burden.

Musk has deep ties to the elder Ellison. Larry Ellison put $1 billion into Musk’s 2022 Twitter takeover. He also invested in Tesla in 2018 and sat on its board for years.

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Market Context

The Ellisons and RedBird Capital Partners committed $43.6 billion in equity, with $54 billion more in loans.

A weekly TradingView chart shows the shares stuck between roughly $10 and $15 for most of the past three years. In early 2021, under the old ViacomCBS name, they topped $95.

Why It Matters

Musk Stake Could Draw Scrutiny in Washington

However, the same report flags a political risk. Democrats raised concerns about Musk’s money and his control of X (Twitter) during the 2024 election.

Even a partial Musk stake in CNN and CBS would likely alarm Washington, the report said, though Musk would probably have no formal say. No commitment has been reported.

Details

CEO David Ellison wants wealthy backers to buy new shares, raising fresh cash after the Warner Bros. Discovery takeover.

Why Paramount Wants Elon Musk’s Money

Paramount agreed to buy Warner Bros. Discovery (WBD), owner of CNN, HBO, and the Warner Bros. studio, for $30 a share in cash. The offer valued WBD at $108 billion including debt, according to a February company release.

Musk, who became the world’s first trillionaire in June, is one of several rich individuals under consideration. The stake size is unknown.

Paramount Stock Nears Multi-Year Lows

Paramount’s Class B shares (PSKY) rose 0.8% to $10.19 on Wednesday afternoon, according to Yahoo Finance. The small gain barely dents a 74.6% slide over the past five years.

The stock sits at less than half its 52-week high of $20.86. Its 52-week low is $7.62.

Earlier this week, Paramount settled an antitrust lawsuit brought by state attorneys general, removing a hurdle to the deal. A brief rally on that news has since faded.

According to a report on Semafor, a Musk check would be a vote of confidence from a billionaire with a devoted retail following.