The inevitable noise surrounding Netflix (NFLX) expansive, $72 billion purchase from Warner Bros Discovery (WBD) is shaking up Wall Street today. Viewers remain skeptical about what an acquisition of this scale would mean for the former’s power over the industry, including one rival in particular.
Challenging the Netflix offer, Paramount Skydance Corp (NASDAQ:PSKY) filed a hostile bid valued today at $108.4 billion, or $30 per share, $18 billion more in cash than its competitor. In response, PSKY has risen 8% to trade at $14.44 at last look, trying to get out of there. Friday’s heavy losses.
Options have been flying off the shelves today amid the hype. PSKY has recorded 34,000 calls traded, triple the average pace and more than six times the number of puts. The most popular is the call on February 17, where new positions are sold to open.
Analysts have yet to comment, but updates could be on the way. As of today, 23 of the 24 brokerages they cover rate the stock as a “hold” or worse. If this bearish sentiment begins to dissipate, PSKY could charge even more.
The equity remains on the short sales restricted (SSR) list, although it appears that short sales have been accumulating lately. Short interest increased 13.8% in the most recent reporting period, accounting for 5.2% of the stock’s available float. With 53.46 million shares sold short, it would take more than six days for short sellers to buy back these bearish bets.