Media mogul John Malone thinks a deal could be brewing between Elon Musk’s SpaceX (SPCX) and entertainment giant Skydance Corporation (SKYD). Malone floated an $8 billion to $10 billion investment figure, including a global output deal for Skydance and a SpaceX investment. This is expected to help Skydance, which has accumulated a mounting debt burden after its Warner Bros. Discovery acquisition.
While it’s less clear how SpaceX benefits from the deal, two factors could be at play: first, Musk has an established business relationship with Larry Ellison, Skydance co-CEO David Ellison’s father. Next, SpaceX wants to grow its Starlink internet service and has been acquiring broadcast spectrum. CBS, which owns numerous local stations, could be a potential fit for that strategy.
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After this news, which was mostly speculative when it was released, Elon Musk reportedly made about a $1 billion investment in Skydance.
Ahead of what could be a monumental deal for Skydance as it seeks to cut costs after its merger, let's take a closer look.
About Skydance Stock
Skydance Corporation, headquartered in New York, is a global media and entertainment company. It produces and distributes movies, television shows, and streaming content for audiences worldwide. The company operates major film studios, the Paramount+ and HBO Max streaming services, and television networks, including CBS. It also owns well-known news brands such as CBS News and CNN.
In October 2026, Skydance completed its acquisition of Warner Bros. Discovery, adding major studios, popular content, and streaming platforms to its business. The deal made Skydance a larger entertainment company with a broader mix of film, television, and streaming operations. The company currently has a market capitalization of $39.28 billion.
SKYD stock is down 54% over the past 52 weeks and 29% over the past six months. That’s because investors are concerned about the company’s ability to manage its heavy debt load and deliver the cost savings promised after the Warner Bros. Discovery acquisition, while the company must prove its combined streaming services can grow profitably. It had reached a 52-week low of $6.61 on Oct. 19, but is up 17% from that level.
Skydance is trading at a relatively cheap valuation. Its forward-adjusted price-to-sales ratio of 0.59x is lower than the industry average of 1.13x.
www.barchart.com Skydance Closed Warner Bros. Discovery Deal to Create Media Giant
Skydance closed the entertainment industry’s one of the biggest deals in October, creating a media giant that can rival the scale of Netflix (NFLX) and The Walt Disney Company (DIS). HBO Max, franchises such as “Harry Potter” and “Sinners,” and networks including CNN are now part of the same company as Paramount+, CBS, and popular titles like “Top Gun” and “The Godfather.”
The deal follows the Skydance takeover of Paramount last year for $8 billion. However, the Paramount-Skydance and Warner Bros. Discovery deal did not come as easily. First, it sparked a bidding war with streaming giant Netflix. After a lot of back-and-forth, Netflix tipped its hat to Skydance and left after Skydance agreed to pay regulatory fees and a $2.8 billion breakup fee. Paramount finally agreed upon a $31 per share bid to acquire Warner Bros. Discovery, resulting in a massive acquisition bill of nearly $111 billion.
The saga did not end there. Amid rampant industry backlash, attorneys general from 12 states sued to block the merger on anti-competition grounds. Rather than engage in a long legal battle, Paramount-Skydance chose to settle it by committing to spend at least $300 million a year on U.S. film production and release at least 30 movies in theaters annually over the next two years, or pay $30 million for each film it fails to release.
Now, where does this leave us?
The combined company, Skydance, has a much larger scale of production and is poised to create what Skydance CEO David Ellison terms “synergies,” which are expected to generate cost savings through large-scale contracts, lower costs on content bidding, and technology. Ellison expects $6 billion in run-rate savings, factoring in 4.3x leverage. The company is also targeting $10 billion in free cash flow by 2030 and a 3x net leverage by the end of 2029.
However, the synergies come with a huge price tag. The company has racked up roughly $80 billion in pro forma long-term debt due to this massive merger. This makes Skydance’s investment thesis significantly reliant on how much cash it can generate and how much debt it can reduce. Moreover, the obligation to invest $300 million a year in U.S. film production has to be respected. Hence, the SpaceX deal could become a game-changer for Skydance.
Against this backdrop, all eyes remain on further earnings to see how Skydance fares. At the end of Q2, Paramount-Skydance had $1.6 billion in cash and cash equivalents and $15.2 billion in gross debt. The company generated $258 million in free cash flow in Q2. For fiscal 2027, Wall Street analysts expect Skydance to report a $0.37 EPS. All eyes will also be on the Q3 earnings for fiscal 2026 (about to be reported on Nov. 9, after the market closes) to see what the company forecasts.
What Do Analysts Think About SKYD Stock?
Recently, analysts at JPMorgan reinstated coverage of SKYD stock with a “Neutral” rating and a $9 price target for December 2027, down from a prior December 2026 price target of $14 before the firm’s restriction period. JPMorgan said Skydance’s larger scale could help it earn more from its content, promote its streaming platforms to a wider audience, and cut overlapping expenses. However, linear TV remains the combined company’s main source of earnings.
Bernstein SocGen analysts halved their price target on Skydance from $12 to $6 and maintained an “Underperform” rating. While acknowledging the possible long-term opportunity, the firm expects share-price volatility to continue as investors weigh uncertainty over cost savings, cash-flow generation, debt levels, and the company’s balance sheet.
Wall Street analysts are taking a cautious stance on SKYD stock. Of the 23 analysts rating the stock, the consensus rating is “Hold.” That’s based on two “Strong Buys,” two “Moderate Buys,” 12 “Holds,” one “Moderate Sell,” and six “Strong Sells.” The consensus price target of $9.68 implies a 27% potential upside from current levels, while the Street-high price target of $16 reflects a 110% upside.
www.barchart.com On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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