Paramount (NASDAQ:PARA) made a name for itself as a movie studio. Over the years, it added television to the roster and now offers streaming services. But it may be down one channel in the coming months, and that’s got investors concerned. While Paramount was up earlier today, it lost those gains by Wednesday afternoon and fell over 1% in the session.
Reports suggested that Paramount was interested in selling off Black Entertainment Television, more commonly referred to as BET, to a group of investors. Interested buyers are prepared to pay close to $2 billion to take over the network, and among those interested are BET’s CEO, Scott Mills, and the current head of CC Capital Partners, Chinh Chu. Several other bidders were mentioned, including television channel owner Byron Allen, widely-known producer and playwright Tyler Perry, and even a group that featured Shaquille O’Neal.
A Win-Win?
There’s no doubt that Paramount pulling out of BET would be a win. It loses a linear television channel at a time when linear television is limping along. It gains a big pile of cash that it can put into its streaming operations and allows it to better cover some debt. However, there are signs that Paramount may have to consider price cuts. Back in March, it tried to sell off BET, but an offer from Tyler Perry for $2 billion wasn’t enough to satisfy Paramount, who, at the time, wanted $3 billion. Nonetheless, what the buyer gets is a bit less clear, aside from a linear television channel with some extremely specific niche marketing capability.
Is Paramount Global a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, five Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 5.09% loss in its share price over the past year, the average PARA price target of $14.82 per share implies 5.36% downside risk.
