Following the October merger of Skydance, Paramount and Warner Bros. Discovery, the new company faces intense scrutiny over its financial health. Its market capitalization has fallen significantly since its debut, and its stock has performed poorly since it began trading. [1] Investors are wary of the company’s debt, estimated at about $80 billion. [1, 17, 18]
Investors see a sharp disconnect between the company’s balance sheet and its market value. [4] Goodwill—an intangible asset recorded when a company pays a premium in an acquisition—reportedly exceeds the new company’s entire stock-market value. [4] This has led investors to believe Skydance overpaid and raised doubts about the company’s ability to generate enough cash flow to meet its obligations. [3, 4]