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A Reddit community of investors who own a combined 1,000,000 shares of Class B Stock in Paramount said in an open letter to the directors of Paramount Global that they are “deeply disturbed by recent reports indicating a potential merger with Skydance Media.”
The group’s collective 1,000,000 shares amounts approximately 0.15% of Paramount Global’s estimated 652,000,000 shares outstanding.
In a letter shared on Twitter by the Wall Street Journal’s Jessica Toonkel, the investors noted that “we have remained loyal to this company for years despite sustained underperformance and missteps.”
“Our belief in Paramount’s potential, even as the company is down 89% from its high, has sustained our investment,” the investors continued. “We believe in the potential for long-term value creation under CEO Bob Bakish and the current management team.”
The investors praised the strategy “the team has implemented since 2022,” and added they are collectively “deeply disturbed by recent reports indicating a potential merger with Skydance Media and the sale of Paramount’s controlling shares.” The new, they continued, “appears to cater to the specific needs of one shareholder, Shari Redstone,” instead of to the group of shareholders as a whole.
The collectives concerns more specifically pertain to shareholder dilution, undervaluation of Paramount, and a lack of reviewing of alternatives. The group has called on Paramount to put the needs of all shareholders first and to “conduct thorough due diligence.”
“A deal structure favoring a single shareholder would be highly detrimental to both the Class A minority shareholders and Class B shareholders and runs counter to the principles of sound corporate governance,” the letter continued. “We implore you to uphold your fiduciary responsibilities and protect the interests of ALL Paramount Global shareholders.”
The deal in question would give David Ellison’s Skydance Media control through Redstone’s stake in Paramount, and has been opposed by several shareholders. David Katz, president and chief investment officer of Matrix Assets Advisers, which owns more than 350,000 Paramount shares, told TheWrap, “Shari Redstone is literally only looking out to maximize the value of Shari Redstone, which is terribly disconcerting.”