Paramount Skydance shares have quickly turned into the mecca for momentum-driven retail traders who piled into the stock on hype around UFC matches, according to Don Bilson, head of event-driven research at Gordon Haskett. The stock with the ticker PSKY started trading last Friday after Paramount Global’s merger with Skydance Media finalized. On Wednesday, six days since its debut, shares skyrocketed 37% to become the top-performer in the S & P 500 that day. PSKY 5D mountain Paramount Skydance (PSKY) shares in the past five days “Congratulations are in order this morning for Shari Redstone, David Ellison, the old Paramount board, and everyone else who decided it would be best to leave a Paramount stub in public hands so it could become a playpen for momentum goons,” Bilson said in a note to clients Thursday. “It turns out that it only took six days for the goons to take control.” The catalyst seems to be the Monday announcement that Paramount has acquired the exclusive rights to show all events from the Ultimate Fighting Championship in the U.S. from TKO Group in a $7.7 billion, seven-year deal. UFC President and CEO Dana White also touted a cage fight at the White House on the South Lawn. “This looks like a case where White got the ball rolling and things got squeezy when the goons jumped into the ring,” Bilson said, calling PSKY “a newly certified meme stock.” PSKY currently has 15% float sold short, according to FactSet. Bilson noted that the company’s float shrunk greatly since the deal closed, which makes it more vulnerable for “mischief” among momentum traders. With the small amount of shares available for trading, any big pop can cause a “short squeeze” where hedge funds short the stock are forced to buy it to cover their positions. Paramount was cooling off Thursday, down 6%.
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