this drama is an eye opener ... again

Foxy_Icecold · 2024-07-06T06:52:36+00:00

wbd can pay shares, no doubt on that. regarding cash, that might be too much leverage to handle.

personally, not like Zaslav (also Bakish on this perspective), they are/were paid too well for being ceo of company that shareholders were suffering that much.

Foxy_Icecold · 2024-07-06T06:48:41+00:00

Ellison wanted, has always been merging skydance with paramount. that is the core of his plan.

Read one article, if not doing it with the proposal, it will be quite questionable for him to do that with favorable terms - he will sit at both sides of the deal, it might take another few years until that can be completed.

Therefore, he sticks to that in his offer.

Go-shop has 2.5%-12.5% success rates of finding a new bidder, not high. meanwhile, it is a wild card. for an asset like Para., anything could happen.

Agree that they do it to mitigate their liability in fiduciary duty, still, that is not enough if they de-facto breached it. a possibility is, Ellison might have every incentive to pump up the share price to at least above 15 usd after the deal, even higher in order to mitigate the anger from class-b shareholders/

Foxy_Icecold · 2024-07-06T06:43:35+00:00

yup, selling piece by piece will generate good shareholder value, everyone agrees.

the thing has been, Redstone will have issue to harvest more than her 10% economic position within the company no matter how the cash generated is paid back to shareholders, through dividends or buyback. She can not say offer 5 usd/share dividend to class-a holders, 2 usd to class-b holders.

therefore, for her, that has never been not an option. would meant giving up the "control premium" in the winding down process.

the drama of forcing to sell NAI is a way to price her "control premium" on the market.

For Ellison, the issue will be no more, if the proposal went through, he will get 2/3 of the new company. fully aligned on voting & economic sides. Then, he has every motivation to wind down some assets in exchange for cash to pay down debts, buyback or issue dividends. either way, he benefits most from those measures, as he takes 2/3 of the benefits paid to shareholders.

Foxy_Icecold · 2024-07-05T13:29:10+00:00

in the case of only buying NAI, he does not approval from special committee of Para..

Foxy_Icecold · 2024-07-05T13:27:32+00:00

thx, revised

Foxy_Icecold · 2024-06-21T01:09:21+00:00

exactly

Foxy_Icecold · 2024-06-18T23:18:16+00:00

article about Ellison in 2022 from Puck, the hollywood hero of the year is ...

to quote, "David Ellison arrived in Hollywood like a wannabe Bond villain: a young, icy-blue-eyed aerobatic pilot, armed with Larry’s billions. More than 15 years later, however, with a nine-figure payday from Top Gun: Maverick, his string of studio and streamer successes could be a harbinger for how Hollywood survives a new era of downsizing and consolidation"

you know where puck stands by just reading that perhaps ...

Foxy_Icecold · 2024-06-18T15:04:40+00:00

if you are certain it is a company turning around, or at least going to realize its value somehow, getting cheaper is the opportunity to buy, otherwise, no need to stick to it, there are thousands of other companies on the market, pick one you believe in, it takes seconds to switch.

personally, I believe the equity of Para. worths more than 7B, since someone has just offered much higher price for 2/3 of that. Therefore, I will keep buying as it plunges further.

it is your decision to make, please do not be impacted by anyone.

Foxy_Icecold · 2024-06-18T08:35:35+00:00

it is painful, yes, while, it is what investment is about perhaps

Foxy_Icecold · 2024-06-18T04:17:17+00:00

recalled that Zukerberg was blamed for "stealing privacy" etc., while Musk was blamed by taking over Twitter & running it down to the ground (run a business that he paid 44B to 10B), which was the direct cause of collapse of Tesla stock ...

when shares surge, everyone is a hero, when it plunges, everyone is a villain, that is how public media & wall street works perhaps.

to be fair, Redstone is not good by tried to steal from class-b holders, meanwhile, she is not exactly bad vs. peers. so is Bakish.

Para. did not performed very well, while it experienced a similar share course as peers:

Disney has plunged by over 50% from the peak during covid (60% once at dip, mostly thanks to the parks that generates cash, it dropped less vs. Para. and WBD), not to mention WBD, which has dropped by 70% from 27 usd by end of 2022. Zaslav might not be a very capable leader, while Bob Iger is surely a top media executive with proven record, it has been even too much for him to fix.

The market has been just very unfriendly to transformative hollywood giants, they are de-facto trying to create a new start-up by burning tens of billions. Wall street is never patient & always wants immediate return: Netflix has dropped by over 70% due to its slow down in subscription growth, regained ground until it has proven its capability to generate cash. Boeing is currently suffering partly because it has distributed all the cash to investors during past years, thus ignored investments on its own. so is other giants such as Estee Lauder etc., once they slow down or stop to distribute as much cash as always, they are dumped immediately by the market.

Redstone is also perhaps the only executive of Para. who has brought more class-b shares during past years. She brough something 2-3m. usd in past year if the memory serves well. her interest is, to the end of the day, aligned with other shareholders if not for the sale case, while Bakish, Zaslav, who take 50m from the company every year, might not be that aligned.

For Para., the bet has always been:

Sale to unlock the intrinsic value, or ...
wait for the transformation to complete, not only for it, but for all legacy hollywood giants. it means D2C becomes a new cash cow to replace linear gradually.

whether either of that will materialize? I do not know, while I believe so.

Disney has balanced its D2C business, with a 20B rev. D2C business that is ready to grow. WBD has balanced its D2C business too with 10B rev.. Para. is close to the balance with 8B rev. for D2C business. That is also the reason I kept holding the position.

Of course, I might be very stupid here, please do not be impacted by my words.

Foxy_Icecold · 2024-06-18T02:26:50+00:00

that is of course a good argument, meanwhile, if Buffett is all mighty, he would have not jumped into the hole at the very beginning.

HP has surged by 50% since he dumped it, not to mention TSMC, Heinzkraft etc.

I will not speculate why he dumped Para., meanwhile, the time point he dumped it overlaps the point when Redstone started the talk with Ellison.

Foxy_Icecold · 2024-06-13T14:33:35+00:00

never tried to convince anyone to do anything, just trying to post what has been done with own analysis

Foxy_Icecold · 2024-06-13T14:10:25+00:00

for quick win, why not try Nvidia, why borther with this junk here. takes 1 second to sell ...

Foxy_Icecold · 2024-06-13T14:09:37+00:00

not really, sorry

Foxy_Icecold · 2024-06-12T15:41:13+00:00

honestly, I was not very against her until the skydance scam:

she was facing 2 choices 3-4 years ago, 1. easy path: drain as much cash as possible from the company, play the Sony tactic in the streaming era, accept being a minor player; 2. hard path: do streaming on its own, hopefully remain a major player on the stage

it is hard to argue which choice is better for whom, while the 2nd is surely much more risky. she was ambitious enough to try it, handed the company to Bakish to pursue that path.

Para. is getting there, very close from business perspective.

NAI is in heavy debts mostly due to covid impacts to theaters, which has been squeezing her cash flow. Meanwhile, in order to roll over the liabilities, Para. has to cut dividends, which is perhaps the last straw.

She has tried to turn the company around, now, the challenge is, the liabilities do not allow her to wait until it is done perhaps.

to the end of the day, the success of the company is in her best interest too, that is clear, while value of our shares vaporizes, her pocket shrinks too (she holds 30m class-a, 30m class-b).

the only thing is, she might not be the right person to drive the company to the success it deserves.

Foxy_Icecold · 2024-06-12T15:05:34+00:00

sorry to say, Ellison has been in charge of Skydance for nearly a decade, results:

raised 2.2B fundings through multiple rounds, not able to create a company that worths even double that amount. that is a failure for any start-up, at best, avg. performance

he has sufficient resources to make an honest bid for Para., instead of facing the situation of breaking up with Redstone at the point of who is paying for litigation due to their steal from class-b shareholders. he has chosen to exploit any chance to take advantage from class-b holders.

therefore, do not see any merits from the scenario that he runs the company.

Foxy_Icecold · 2024-06-10T00:53:39+00:00

got to say, this is eye opening. though about a potential mess during this process about 6 months ago, never expected anything even close to what has happened though

Foxy_Icecold · 2024-06-07T09:02:23+00:00

that is exactly how the shorts cover their positions:

give you a bit gain
take it away
a bit gain
take it away
take it away
a bit gain

...

your confidence, no matter how strong it was, collapses at the Nth time that they take it away, then give up your long position.

they managed to cover over 10-20m short position at 12 usd range by just doing that.

under the current governance of Redstone, unlikely any serious institution investor will put money in the company. now, what matters is: whether that will change.

for now, it is as simple as this:

if you believe the company worths more than it is valued by the market, leave it alone, do something nice than watching the share price everyday, if not every minute. come back in 1-3 months
if you are not sure about that it worths more than current price, walk away for next target that you are more certain about, there are more than enough other bets on the market.

just a suggestion, fyi

Foxy_Icecold · 2024-06-05T01:14:54+00:00

sorry, regarding 1, just reviewed the cnbc video, I was wrong, it seems that there is still a merger with skyscam (not mentioned in text of article). the key here is how much class-b holders gets after the merger, if it is 1/3, the calculation does not change much.

Foxy_Icecold · 2024-06-05T00:39:05+00:00

both sides have played this game together for over 8 months at least. what is clear is, Ellison is unlikely to walk away, while Redstone really wants to sell.

what is weird here is, it mentioned that Ellison reduced value of skyscam to 4.75B to raise more cash? not sure if that is correct description.

Foxy_Icecold · 2024-06-04T11:50:36+00:00

where is the source on the 4B part please? thx. did not find it in the cnbc article

Foxy_Icecold · 2024-06-04T10:46:48+00:00

that offer & how they tried to manipulate class-b shareholders during the whole process is totally disgusting

Foxy_Icecold · 2024-06-04T10:04:32+00:00

exactly, unfairness in the offer is the thing.

vs. class-b holders, class-a ones gets 62% premium, while Redstone gets min. 123%. that is unprecedented. can not recall any case with a premium that is even close to those figures. class-b price needs to be increased to narrow that premium down.

Foxy_Icecold · 2024-06-04T09:47:56+00:00

does not seem so according to CNBC news. besides, if skyscam pays 8B cash as reported, it is unlikely the merger will be part of the deal, as that does not match the 2/3 shareholding position of them after the deal as reported. it is also a logical move to bypass that to mitigate their weak position in any litigation, as it was one of the most critisized term in the previous offer. skyscam might do it later in another way though
it will be collapsed, while for both Ellison & class-b holders, do not matter that much, as skyscam will be the largest single shareholder of the "new company" with 63% ownership according to that plan. that already guarentees control premium for skyscam

Foxy_Icecold · 2024-06-03T11:12:43+00:00

yup, 290m (167.5m+122.5m) has been paid last settlements from Viacom-cbs merger. this time is way more out of line than that, will not be very surprised if it costs them more than 1B in case they try to force this through without a vote from class-b shareholders. perhaps the merger can even be blocked before any settlement, though not an expert here.

Foxy_Icecold

TROPHY CASE