Paramount Skydance Surges 6.85% on $40.4B Ellison Guarantee Amid WBD Hostile Bid Showdown

Summary
• Paramount Skydance (PSKY) rockets 6.85% to $13.945, trading above its 52-week low of $9.95
• Larry Ellison personally guarantees $40.4B in equity financing for WBD bid, addressing board concerns
• Options frenzy: 40,450 contracts traded on 12/26 expirations, with 14-strike calls seeing 40450 shares turned over

Paramount Skydance’s stock erupted in late trading as Larry Ellison’s irrevocable $40.4B guarantee for its WBD bid quelled lingering doubts about financing credibility. The 6.85% surge—pushing the stock above $13.94—reflects renewed confidence in the $30/share all-cash offer, which now matches Netflix’s regulatory terms. With 4.57M shares traded, the move underscores a pivotal shift in the battle for Hollywood’s crown jewel.

Ellison's $40.4B Guarantee Quells WBD Financing Doubts
Paramount’s amended bid directly addressed WBD’s skepticism about Larry Ellison’s commitment, with the Oracle co-founder now personally backing $40.4B of equity financing. This irrevocable guarantee, coupled with a $5.8B regulatory termination fee, neutralized WBD’s leverage in negotiating with Netflix. The move also clarified the Ellison family trust’s asset structure, publishing records showing 1.16B Oracle shares held. These actions transformed market perception of the bid’s credibility, triggering a 6.85% intraday rally as investors priced in a higher probability of WBD shareholders favoring Paramount’s all-cash offer.

Options Playbook: Capitalizing on Volatility and Gamma-Driven Moves
• RSI: 29.44 (oversold) • MACD: -0.686 (bearish) • Bollinger Bands: 12.54–16.62 (price near lower band) • 30D MA: 14.94 (current price below) • Turnover Rate: 0.536% (moderate)

Paramount’s options chain reveals high-conviction bullish positioning. The PSKY20251226C14 call option (strike $14, expiration 12/26) stands out with 40,450 shares turned over, 44.09% implied volatility, and a 0.455 delta—ideal for a short-term rally. Its 57.90% leverage ratio amplifies gains if the stock breaks above the 14.5–15.0 resistance zone. The PSKY20251226C14.5 call (strike $14.5, 49.14% IV, 0.240 delta) offers a 126.32% leverage ratio, capitalizing on a breakout above the 52-week low. Both contracts benefit from high gamma (0.5528 and 0.3892) and theta decay (-0.0632 and -0.0433), making them potent for a 5% upside scenario (target $14.64).

PSKY20251226C14: • IV: 44.09% (moderate) • Leverage: 57.90% • Delta: 0.455 (moderate sensitivity) • Theta: -0.0632 (strong time decay) • Gamma: 0.5528 (high sensitivity to price moves) • Turnover: 40,450 (liquid) • Payoff at 5% upside: $0.70 per contract
PSKY20251226C14.5: • IV: 49.14% (moderate) • Leverage: 126.32% • Delta: 0.240 (moderate sensitivity) • Theta: -0.0433 (moderate time decay) • Gamma: 0.3892 (high sensitivity) • Turnover: 5,571 (liquid) • Payoff at 5% upside: $0.47 per contract

Aggressive bulls should prioritize the PSKY20251226C14 for a short-term breakout trade, while the PSKY20251226C14.5 offers amplified leverage if the stock consolidates above $14.50. Both contracts benefit from the tender offer’s extended expiration to 1/21/26, providing ample time for WBD shareholder sentiment to shift.

Backtest Paramount Skydance Stock Performance
The backtest of the performance of PSKY after a 7% intraday increase from 2022 to the present reveals mixed results. While the 3-day win rate and maximum return indicate some positive short-term movement, the overall 10-day and 30-day returns are negative, suggesting that holding the position for longer periods may not be optimal following the intraday surge.

Act Now: The WBD Bid Showdown Enters Final Stretch
Paramount’s $40.4B Ellison guarantee has recalibrated the WBD bid dynamics, but the stock’s 6.85% surge must hold above $14.50 to confirm a sustainable breakout. Key levels to watch: 1) 14.50–15.00 (resistance from 52W low to 30D MA), 2) 13.50 (psychological support). The sector leader, Disney (DIS), rose 0.7% today, signaling broader media sector optimism. Investors should prioritize the PSKY20251226C14 for a 12/26 expiration play, while monitoring WBD’s shareholder response. Watch for a $14.50 close on 12/26 to trigger a wave of long-dated call buying.