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Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA) shares saw a near 7% rise in pre-market trading following the announcement of a significant write-down and workforce cuts.
What Happened: Paramount Global announced a write-down of nearly $6 billion on its cable networks and plans to cut 15% of its U.S. workforce. This move is part of Paramount’s strategy to reduce costs by $500 million ahead of its merger with Skydance Media.
Approximately 2,000 employees will be affected by the workforce reduction.
Despite the drastic measures, Paramount’s stock, PARA, was trading 6.57% higher at $10.86 in the pre-market, up from its previous close of $10.21. Its other stock, PARAA, also saw a slight increase, trading 1.09% higher in the after-market at $23.25, up from a close of $23.00., as per Benzinga Pro data,
Why It Matters: These developments come in the wake of Paramount’s second-quarter earnings report, which highlighted a revenue miss and a 13% increase in the DTC segment. The media company reported second-quarter revenue of $6.81 billion, down 11% year-over-year. The revenue total missed a Street consensus estimate of $7.21 billion, according to data from Benzinga Pro.
Earlier in July, Paramount had agreed to a merger with Skydance Media to form “New Paramount,” with the combined company valued at $28 billion. This merger ended months of speculation about who would acquire the media company. Paramount’s Non-Executive Chairwoman Shari Redstone emphasized that content is king in the deal’s outcome.
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Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
