A $125 Million Cash Infusion Boosts Paramount Stock

Paramount Global Inc. witnessed a 5% increase in its premarket trading shares following the announcement by its controlling shareholder, National Amusements, of a $125 million investment. The investment, in the form of preferred equity, was secured through a deal with BDT Capital Partners, as stated in a press release on Thursday.

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National Amusements explained that this investment aims to position itself for sustainable growth and support the post-pandemic recovery of its underlying operations, particularly as movie theatre attendance continues to rise. The funds will be allocated to reducing interest expenses and paying down revolving loan and recent term-loan borrowings.

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Shari Redstone, the CEO of National Amusements, emphasized their commitment to supporting Paramount by enabling the necessary measures to build on its success and capitalize on strategic opportunities within the industry.

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Paramount, the parent company of Viacom and CBS, has recently experienced a challenging period, including a significant dividend reduction of nearly 80%, which led to a decline of over 28% in its share price on the day of the last earnings report. Like other players in the media landscape, Paramount is navigating the complex financial landscape resulting from the decline of linear programming and the pursuit of economic viability in streaming services.

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In a statement on May 4, Paramount's Chief Executive, Bob Bakish, highlighted that the company's updated dividend policy will contribute to its ability to deliver long-term value to shareholders as it progresses towards achieving streaming profitability.

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Over the past 12 months, Paramount's shares have declined by 56% in value, while the S&P 500 index has experienced a modest 2% increase.

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