Skydance shares drop 24% as 471 million warrants begin separate trading

Skydance (SKYD) shares closed at $7.06, down 23.84%, as 471 million warrants began trading separately from the stock on the ex-distribution date. The company issued these warrants to former Paramount Skydance (PSKY) Class B shareholders, granting them the right to purchase new Skydance shares at a strike price of $12 each. The warrants expire in 2036.

The detachment of the warrants from the share price triggered an immediate valuation adjustment for SKYD. Skydance, described as a global studio, streaming, and TV media conglomerate, completed its initial public offering in 2026 and has declined 26% since going public.

If all 471 million warrants are exercised, Skydance would generate approximately $5.7 billion in capital. However, this action would increase the company's shares outstanding by roughly 10%. The company carries roughly $80 billion in net debt, which contrasts with expected adjusted EBITDA of $11.2 billion. This leverage profile places Skydance at a forward EV/EBITDA multiple of around 10.

Broader market sentiment was mixed on the day. The S&P 500 (^GSPC) closed at 7,721, down 1.08%, while the Nasdaq Composite (^IXIC) finished at 26,693, down 1.88%. Among media peers, Walt Disney (DIS) closed at $109.01, up 0.40%, and Comcast (CMCSA) closed at $21.05, up 0.81%.