Paramount Skydance (NASDAQ:PSKY) Stock Slips, Merger Delayed Three Weeks

The merger between entertainment giant Paramount Skydance (PSKY) and Warner Bros. Discovery (WBD) has now hit a more serious roadblock, and one that will last for at least three weeks. United States District Judge Araceli Martinez-Olguin extended the current temporary restraining order out another 14 days, which puts the earliest closing date up to August 18. The news was not welcome for Paramount shareholders, who sent shares down nearly 1.5% in the closing minutes of Friday's trading.

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The news is not automatically bad for Paramount, reports note, as the extended restraining order will instead allow lawyers on both sides to set up the schedule and format for the court case that will focus on the preliminary injunction. If the injunction goes through, then the transaction is frozen until the case is decided.

Paramount, meanwhile, continues to push for a three-day evidentiary hearing, which would allow it to discuss "…critical factual issues involving market definition, real-world competitive dynamics, barriers to expansion and incentives." Paramount is sticking by its guns, noting that the various states have engaged in flawed math to reach the conclusions they are advancing with the court now. The states, meanwhile, insist that such a hearing would basically catch them flat-footed, giving Paramount access to a full trial without proper prep time.

Tiny Drama

Paramount is also putting a lot of weight on "micro dramas," reports note, and will be adding some of its first productions in that line over the next few months. Test versions will start appearing over the third quarter. Micro dramas are pretty much exactly what the name suggests: dramas with short run times designed to habituate viewers by getting them to come back regularly.

Paramount wants to take advantage of the growing cohort of viewers that stop in and watch a little Paramount+ throughout the course of a day. Lunch breaks, doctor's office waits, and so on make for good opportunities to grab a quick viewing, and micro dramas might be just the thing to fill in those gaps. The overall plans are still in their early stages, so we may not get much more than the test versions out of this plan.

Is Paramount Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Moderate Sell consensus rating on PSKY stock based on one Buy, four Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 34.94% loss in its share price over the past year, the average PSKY price target of $11.29 per share implies 36.96% upside potential.