Paramount-Skydance Merger in Regulatory Freefall—Time to Short This Stock

The Paramount-Skydance merger, once seen as a bold move to reshape the entertainment industry, is now a regulatory trainwreck. From the Trump lawsuit to editorial independence scandals, this deal is collapsing under its own weight—and investors holding Paramount (PARA) are sitting on a time bomb. Here's why you should consider shorting this stock before it blows up.

The Trump Lawsuit: A $20 Billion Sword of Damacles

Let's start with the elephant in the room: Donald Trump's $20 billion lawsuit against CBS. This isn't just about a “60 Minutes” interview—it's a legal landmine that could torpedo the merger. Senators Elizabeth Warren and Bernie Sanders have already accused Paramount of trying to bribe the Trump administration by settling the lawsuit to secure FCC approval. And they're right.

The merger's $400 million breakup fee means Skydance will get paid handsomely if regulators say “no”—but Paramount's shareholders will get crushed. The FCC is under pressure to reject the deal unless Paramount caves to Trump's demands. This isn't speculation: shows a 25% drop. That's a market screaming “DANGER.”

FCC's Regulatory Gauntlet: DEI Demands and Political Pressure

The FCC isn't just reviewing the merger—it's weaponizing its power. Chairman Brendan Carr is demanding Paramount abandon diversity, equity, and inclusion (DEI) programs, aligning with the Trump administration's anti-DEI agenda. Even after Paramount scaled back these initiatives in February, Carr isn't satisfied. This isn't about good governance—it's political score-settling.

Meanwhile, the “news distortion” complaint over the Harris interview has become a proxy for censorship. The FCC's investigation into CBS's journalism is a First Amendment overreach that could set a dangerous precedent. If the FCC can penalize a network over editing choices, every media company is at risk. This isn't a merger—it's a regulatory Rorschach test.

Corporate Governance: A House Divided

Internal chaos at Paramount is making things worse. The resignations of CBS News president Wendy McMahon and “60 Minutes” producer Bill Owens signal a revolt against leadership's willingness to compromise journalistic integrity for a merger. Correspondent Scott Pelley's public criticism—that Paramount is “selling out to the Trump administration”—isn't just PR—it's a shareholder red flag.

Worse, the board's rejection of Project Rise Partners' $13.5 billion bid (vs. Skydance's $8 billion) is under fire. Delaware courts are now questioning whether directors prioritized Skydance's ties to the FCC over shareholder value. If Project Rise's lawsuit succeeds, PARA's stock could skyrocket—but only if the merger collapses first. Until then, uncertainty reigns.

Why You Should Short PARA Now

This merger is a triple threat: regulatory, legal, and reputational. Here's the math:

1. FCC Rejection Risk: If the merger fails by July 7, PARA's stock could plummet as the $400M breakup fee hits earnings.
2. Project Rise's Lawsuit: A Delaware court could force a new bidding war, but prolonged litigation will keep PARA's stock in a liquidity trap.
3. Reputational Damage: The optics of settling with Trump or abandoning DEI programs will alienate talent and advertisers.

shows PARA is twice as volatile—perfect for shorting.

Action Plan: Short PARA or Use Put Options

• Short the Stock: Borrow PARA shares at ~$11.67 and sell them now. If the merger fails or gets delayed, buy back shares at a lower price.
• Put Options: Buy puts with a strike price of $10-$12 to profit if PARA drops below those levels by expiration.
• Hedge with Media ETFs: Go long on SPDR S&P Media ETF (XME) to offset broader sector declines if the merger's failure triggers a contagion.

Final Warning: This Deal Is Dead on Arrival

The writing is on the wall. The FCC won't greenlight a merger that smells of political pay-to-play. The Trump lawsuit is a poison pill, and the board's missteps have made PARA a governance disaster. Investors who cling to this stock are gambling with their money.

This isn't about the entertainment industry—it's about who controls it. And right now, the FCC and the Trump legal machine are holding all the cards. Short PARA now before the regulatory reckoning hits.

The clock is ticking—July 7 is a deadline, not a guarantee.