Skydance shares fall 22% after 471 million warrants issued to public shareholders

Left · 1Shares of Skydance, the company formed by the merger of Paramount and Warner Bros. Discovery, fell as much as 25% in trading on Wednesday 14 October 2026. 1 Mixed · 2By 11 a.m. ET, Variety reported, the stock was down 25.4% at $6.78 a share, giving a market capitalisation of about $34 billion; Deadline reported that it closed down 22% at just over $7. 1 2 Mixed · 2The drop coincided with the distribution of about 471 million warrants, which let holders buy Class B stock in the new company. Variety says they went to holders of Paramount Skydance's PSKY Class B shares; Deadline says one warrant was issued per share held by a public stockholder on the Oct. 5 record date. 1 2

Left · 1Each warrant initially allows its holder to buy one Skydance share for $12. If all were exercised, that would raise about $5.65 billion for the company and increase the share count, diluting current shareholders. Variety said it is not known how many have been exercised. 1 Left · 1The warrants are meant to give PSKY shareholders the chance to buy shares "on similar terms" to the $47 billion equity syndicate backing the Warner Bros. Discovery deal, whose shares were priced at $12. That syndicate includes David Ellison, Larry Ellison, RedBird Capital's Gerry Cardinale, LionTree and the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. 1 Centre · 1Deadline reports that the warrants went to holders of about 9% of the common stock, while about 90% of the investor base, including Larry Ellison, RedBird and Middle East sovereign wealth funds, did not receive them. 2

Mixed · 2The warrants began trading separately on the New York Stock Exchange on Wednesday, with an official closing price of $2.20. The NYSE had announced after Tuesday's close that it would adjust the official closing price of Skydance Class B stock down by $0.19368, from about $9.27 to about $9.07, to reflect the warrants. 1 2 Mixed · 2Variety said the day's movement had more to do with the warrants than anything else. Deadline, whose headline calls it a "technical adjustment", also points to a broader market selloff: U.S. annual inflation rose to 3.7% in September, above expectations, raising fears of higher interest rates that hit debt-heavy companies hard. 1 2 Centre · 1On the day, the Nasdaq fell 1.9%, the S&P 500 1.1% and the Dow about 50 points, while Apple rose 0.5% to $343 and regained a $5 trillion market value. 2

Mixed · 2Both outlets note the company's debt load of nearly $80 billion and Wall Street's wariness. The combined company's pro-forma annual revenue is nearly $70 billion, and the deal was valued at $111 billion including assumed Warner Bros. Discovery debt. Deadline adds that investors doubt Skydance can find a promised $6 billion in cost synergies. 1 2 Mixed · 2The stock began trading on the NYSE as SKYD on Oct. 6, when the merger closed. Last week, CEO David Ellison and co-CEO Ynon Kreiz announced their senior executive team. Deadline says the debut was rocky. 1 2