Shares of newly merged, and highly shorted, media company Paramount Skydance suddenly soared, fueling a ‘meme-on-steroids feel’
Shares of the newly merged media company Paramount Skydance are up more than 20% on Wednesday.
Shares of Paramount Skydance Corp. were rocketing higher Wednesday, sparking talk that the media company is the latest to benefit from a meme-stock-like buying wave.
Paramount Skydance’s stock (PSKY) was up 34.6% in recent afternoon trading, marking the latest twist in an eventful few days for the company. Trading volume ballooned to about 102 million shares, compared with the full-day average over the past 30 days of 16.7 million shares.
The stock is on pace for its largest-ever one-day percentage increase, based on FactSet data since it started trading in June 1990. The shares were also headed for their highest close since Dec. 29, 2023.
While the stock was up as much as 2.9% at its premarket high, the stock really started to take off as the opening bell rang. It was up as much as nearly 60% at its intraday high, before paring some gains.
The rally comes even as the company did not issue any press releases. The only filing with the Securities and Exchange Commission was a Form 144 filed after Tuesday’s close, showing that former-Chief Financial Officer Naveen Chopra registered 101,083 Paramount Skydance shares for sale.
The company did not immediately respond to a request for comment.
Last week Skydance Media and Paramount Global completed a drawn-out merger process. The ink was barely dry as the newly merged company clinched a blockbuster $7.7 billion deal with TKO Group Holdings Inc. (TKO) to broadcast its highly coveted UFC fights.
But despite the apparent good news, Paramount Skydance’s stock had extended its recent pullback, alongside peer media stocks. It had closed Monday at an 11-month low, after tumbling 23.9% in two weeks.
Read: Good news for media companies is proving to be bad news for their stocks.
Short interest as a percentage of Paramount Skydance’s public float of shares is 13.4%. That compares with 4.3% for Warner Bros. Discovery Inc.’s stock (WBD), and about 1.1% for Walt Disney Co.’s stock (DIS) and 1.2% for Comcast Corp. shares (CMCSA). A key metric, short interest refers to the number of shares that have been used to bet that prices will fall.
Also read: Heavily shorted stocks have been on a tear lately. Consider this before buying into the rally.
Posting on X in response to CNBC’s Jim Cramer, @DrPatelPhD wrote that Paramount Skydance has a “meme-on-steroids feel.” The post cited Paramount Skydance’s small public float as a key. “Treat it like a high-volatility special situation tied to execution risk, not just a Reddit pump,” the X account, identified as a University of Chicago Ph.D. holder named Dr. Patel, added.
Meme stocks have seen a recent resurgence, which has sent shares of Opendoor Technologies Inc. (OPEN), Kohl’s Corp. (KSS) and Krispy Kreme Inc. (DNUT) soaring.
The flurry of meme-stock activity showed that the underlying drivers of the phenomenon never really went away after the original meme-stock explosion in 2021, according to Leuthold Group, a market-research and money-management firm.
In a report released last month Greg Swenson, senior research analyst and co-portfolio manager with the Leuthold Core Investment Fund LCRIX LCORX, Leuthold Global Fund GLBIX GLBLX, Leuthold Grizzly Short Fund GRZZX, Leuthold Global Industries Fund and Leuthold Select Industries ETF LST, said that it shouldn’t be surprising that meme-stock activity has “bubbled back to the surface.”
“The behavior,” he added, “never really left.”
Earlier this week Tom Bruni, editor in chief and vice president of community at Stocktwits, a social-media platform on which investors swap and discuss ideas about markets, told MarketWatch that the recent meme-stock rally reflected broader trends in the market.
“I think, more broadly, it’s because ‘animal spirits’ are alive and well,” he said, pointing to a record rally off April lows. “People are looking for other opportunities.”
-James Rogers
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