Skydance Shares Fall In New York Stock Exchange Debut Amid Debt Debate

Shares in Skydance Media fell 3% on Tuesday, their first day of trading on the New York Stock Exchange.

The stock’s new ticker symbol, SKYD, is an update from PSKY, the one used for Paramount Global shares. Skydance stock finished the day at $9.51 and has pulled back 15% since the merger of Paramount and Warner Bros. Discovery under the Skydance banner was first proposed last February. Historical comparisons are not exact, as the stock used to trade on the Nasdaq, though the context is considered valid by market watchers.

After an 11th hour delay over the summer due to antitrust lawsuits filed by 12 states and the Writers Guild of America, the $110 billion merger finally closed Tuesday morning before the trading day began. The combined company is starting off with $70 billion in pro-forma annual revenue and assets like CBS, HBO, CNN, Nickelodeon and the Warner and Paramount film and TV studios.

The deal initially saddles the company with $80 billion in debt, and the leverage ratio approaching seven times EBITDA has made some investors nervous. Credit ratings agency Fitch cut Skydance’s rating on Tuesday, citing the debt along with what it called “structural pressure on linear revenues, streaming competition and hit-driven content risk.”

RedBird Capital founder and Skydance board member Gerry Cardinale has acknowledged the scale of the debt but has said he is “all in” on the deal, putting $4 billion into Skydance. He expects that the combined entity’s combination of intellectual property, proven brands and technology-forward strategy will combine to increase revenue despite industry headwinds. Cardinale reminded attendees at a Bloomberg conference in L.A. last week that he is “a growth guy.”

While CEO David Ellison and other executives met with employees on the Warner lot and were scheduled to mingle with the media at a press event across town at Paramount, the management team has not yet made a full pitch to Wall Street. Accordingly, Tuesday’s closing and “Day One” activities did not elicit an immediate wave of reports from analysts, who are poring over SEC filings and adjusting their estimates for the new company.