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Paramount's Merger Shake-Up: S&P 500 Eligibility in Jeopardy
6 Aug
Summary
- Paramount's $8B market cap may be too small for S&P 500 after Skydance merger
- Merger could shrink Paramount's float-adjusted value to $3B, below S&P's criteria
- Applovin and Robinhood considered top candidates to replace Paramount in S&P 500
As of August 6th, 2025, Paramount Global (PARA) is facing a potential shakeup in its S&P 500 index listing. The company's impending merger with Skydance Media, set to close this Thursday, could make it too small for the benchmark large-cap index.
Paramount's current market capitalization of around $8 billion is one of the lowest in the S&P 500, and well below the $22 billion threshold required for new entrants. While market cap alone doesn't usually lead to a company's removal, S&P Global also considers a firm's float-adjusted market cap and liquidity when determining eligibility. The Skydance merger is expected to significantly impact both of these factors for Paramount.
According to the merger terms, Skydance will own roughly 70% of Paramount's outstanding shares, potentially shrinking the company's float-adjusted value to just $3 billion. This amount may be deemed too small by S&P Global to ensure adequate liquidity and appropriate representation in the index.
The potential removal of Paramount from the S&P 500 could open the door for other companies to join the prestigious index. Investors in Applovin (APP) and Robinhood (HOOD) have been hoping for such an opportunity, as both were considered top candidates to replace Hess (HESS) earlier this month when it was acquired by Chevron (CVX). However, their much larger market caps of $130 billion and $92 billion, respectively, may work against them this time, as index managers may prefer a replacement of similar size to Paramount.
