Skydance shares drop 22% after issuing 471 million warrants

Skydance Corp. shares fell 22.2% on Wednesday, closing at $7.06 after the company issued about 470.7 million stock warrants to eligible shareholders. The warrants, granted to holders of Skydance Class B common stock as of the Oct. 5 record date, allow the purchase of one Class B share at $12 each and expire in October 2036, unless certain conditions trigger an earlier date. If fully exercised, the warrants could generate roughly $5.7 billion for the company.

The distribution follows Skydance’s completion of a $110 billion takeover of Warner Bros. Discovery, which combined assets such as CBS, CNN, Paramount+ and HBO Max under a single entity that now trades on the New York Stock Exchange under the ticker “SKYD.” Analysts at Wells Fargo described the warrant issuance as the final step in closing the transaction. CEO David Ellison has said the merger positions Skydance to compete more effectively with major streaming and technology firms.

The combined company plans to merge HBO Max and Paramount+ into a single streaming service and target about $6 billion in cost savings, while carrying an estimated $80 billion in debt.