Shares of Paramount Skydance, the newly merged entity now headed by David Ellison, shot up by double-digits on Wednesday — despite no news indicating a change in the media company’s financial outlook.
As of 2:30 p.m. ET, shares of the new Paramount, trading under the symbol “PSKY” on the Nasdaq, were up 38% to $15.12 per share. That came after hitting an intra-day high of $17.53/share, a 60% bump from the previous price price.
That led Wall Streeters to conclude that Paramount Skydance was a “meme stock,” which Merriam-Webster defines as a stock “that experiences a temporary sudden surge in popularity and price due to a coordinated effort (such as a viral social media campaign) by small investors.”
On Wednesday morning, CNBC’s Jim Cramer posted on X, “Paramount, (PSKY), is a meme stock!!!!!!!!!!!!!! Small float… shocking.”
Cramer’s “small float” comment refers to a situation where a company has a relatively small number of shares that are available for public trading. In that case, a stock is much more volatile. Trading volume for PSKY was unusually heavy Wednesday, with 100 million shares traded as of 2:15 p.m. ET.
The new Paramount has about 1 billion shares outstanding; of those, only about 30% are available for public trades. The remaining 70% of Paramount Skydance’s shares are held by the Ellison family (with Oracle founder Larry Ellison having financed the majority of the Paramount Global takeover) and investment partner RedBird Capital. The Ellisons hold 100% of the voting power in the new Skydance; the Class B shares that trade on Nasdaq are nonvoting shares.
The deal creating Paramount Skydance (which is calling itself “Paramount, a Skydance Corporation”) closed on Aug. 7. That came more than a year after the initial agreement between Skydance and RedBird and Shari Redstone, the controlling shareholder of Paramount Global.
On Monday (Aug. 11), the new Paramount announced a major deal with UFC, worth $7.7 billion over seven years, which will bring the mixed martial arts promoter’s tentpole events exclusively to Paramount+. That news didn’t immediately push the stock up: Shares of Paramount closed down 3.7% on the day Monday.
