Stock Drops for Paramount and Warner Bros. Discovery

Paramount Global and Warner Bros. Discovery saw their stocks take a hit on Monday following analyst concerns and reports of a halted merger.

Stock Performance

Both Paramount and Warner Bros. stocks were set to close at their lowest since 2009, with Paramount shares down 5.7% to $10.32 and Warner Bros. dropping 4.3% to $8.30.

Analyst's View

According to Macquarie analyst Tim Nollen, challenges in linear TV advertising and the impact of cord-cutting continue to pose obstacles for Paramount's growth and cash flow. Nollen maintained an Underperform rating on the stock with a target price of $10.

Recent Financial Results

The drop in stock prices follows disappointing fourth-quarter financial results, where both companies reported declines in TV advertising revenue compared to the previous year.

Merger Talks Disrupted

The decline in stocks was further fueled by reports that Warner Bros. had halted discussions to acquire Paramount, while Skydance Media is still conducting due diligence for a potential acquisition.

Industry Challenges

Paramount has been facing profitability struggles amidst the decline of traditional television viewing and the competitive landscape of streaming services.

Both Warner Bros. and Paramount declined to comment on the situation, while Skydance has yet to respond to requests for a statement.