According to a Semafor report on Wednesday, Paramount Skydance has held talks about bringing in Elon Musk as an equity investor. Meanwhile, the company’s shares are trading close to their lowest points in years.
Following the Warner Bros. Discovery acquisition, CEO David Ellison is seeking wealthy backers to purchase new shares in order to secure fresh capital.
Why Paramount Wants Elon Musk’s Money
As outlined in a company release from February, Paramount agreed to acquire Warner Bros. Discovery (WBD)—the parent company of CNN, HBO, and the Warner Bros. studio—for $30 a share in cash, putting the total valuation of WBD at $108 billion including debt.
The transaction involves $43.6 billion in equity committed by the Ellisons and RedBird Capital Partners, alongside $54 billion in loans.
Semafor reported that Larry Ellison, the founder of Oracle and father of David, personally guaranteed over $40 billion of that equity. Bringing in new investors would help distribute that financial responsibility.
The elder Ellison shares strong connections with Musk, having contributed $1 billion to Musk’s 2022 acquisition of Twitter. Furthermore, Larry Ellison invested in Tesla back in 2018 and served on its board for several years.
While the exact size of the potential stake remains undetermined, Musk—who reached the milestone of the world’s first trillionaire in June—is among multiple affluent individuals being evaluated.
Paramount Stock Nears Multi-Year Lows
Yahoo Finance data shows that Paramount’s Class B shares (PSKY) ticked up 0.8% to reach $10.19 on Wednesday afternoon. This minor increase does little to offset a 74.6% decline over the course of the last five years.
Currently, the stock trades at less than half of its 52-week peak of $20.86, while its 52-week trough stands at $7.62.
Data from a weekly TradingView chart indicates that the shares have largely hovered between roughly $10 and $15 throughout the past three years. Back in early 2011, trading under the former ViacomCBS banner, the stock surpassed $95.
Earlier in the week, Paramount resolved an antitrust lawsuit filed by state attorneys general, thereby clearing a major impediment to the merger. A brief market rally triggered by the announcement has since subsided.
Musk Stake Could Draw Scrutiny in Washington
Semafor’s reporting notes that financial backing from Musk would serve as a vote of confidence from a billionaire who commands a dedicated following among retail investors.
At the same time, the publication points out potential political complications. Throughout the 2024 election cycle, Democratic lawmakers voiced concerns regarding Musk’s financial influence and his ownership of X (formerly Twitter).
The report suggests that even a minor investment by Musk in CNN and CBS would likely cause concern in Washington, although he would likely hold no formal decision-making power. As of now, no formal commitment has been announced.
Frequently Asked Questions
Has Elon Musk officially invested in Paramount?
No formal commitment has been reported yet, though executives have discussed the possibility of an equity injection from him.
Why is Paramount looking for new equity investors?
CEO David Ellison wants to bring in wealthy backers to buy new shares and raise fresh cash following the Warner Bros. Discovery takeover, which involves substantial equity and loan commitments.
What connection exists between Elon Musk and Larry Ellison?
Larry Ellison, Oracle founder and father of Paramount CEO David Ellison, previously invested $1 billion into Musk’s 2022 acquisition of Twitter, invested in Tesla in 2018, and served on Tesla’s board for many years.
Why might a Musk investment face political scrutiny?
Democrats previously raised concerns regarding Musk’s wealth and his control of X during the 2024 election, meaning a stake in media properties like CNN and CBS could trigger concern in Washington.
