Skydance Corp. ended October 15 with a market capitalization of $36.6 billion, excluding the value of newly issued warrants, Variety reported. That was less than half the roughly $88.7 billion combined value of Warner Bros. Discovery and Paramount Skydance on October 5, their final trading day before the merger.
The comparison follows a volatile debut for the combined company. Skydance shares fell 22% on Wednesday after the company distributed about 471 million warrants that let eligible holders buy new shares for $12 each. The stock recovered 2.8% on Thursday to close at $7.26.
Skydance said the warrant distribution would have implied a $45.6 billion market cap at a $9.07 share price. It valued the warrants at about $1 billion at the time of that calculation, for total equity value of $46.6 billion. The warrants closed October 15 at $2.96 each, while Variety's $36.6 billion figure excluded them.
Debt and cost savings loom over the valuation
Paramount paid Warner Bros. Discovery shareholders about $78 billion in cash and assumed $33.1 billion of WBD debt. Variety reported that the merged company now carries nearly $80 billion in net debt, with annual interest payments expected to exceed $6 billion.
Skydance has projected $6 billion in annualized cost savings over three years while continuing to invest in content, including more than 30 theatrical releases a year. Variety said analysts and credit-rating agencies remain skeptical that the company can reach those targets while reducing its debt.
