Paramount Global (NASDAQ:PARA) stock ended last week on a high note, experiencing a notable surge after news broke that two prominent names are considering a takeover of the company. Indeed, CEO David Ellison of Skydance Media and RedBird Capital are reportedly exploring a takeover bid that could change the direction of Paramount entirely.

PARA stock is still in full focus today, but shares are no longer rising. Currently, the stock is 3% in the red. This mixed reaction from the market raises some questions as to what the potential deal means for the company’s future.

This year has been quite mixed for the entertainment company in general. Indeed, PARA stock has made significant progress over the past month — up more than 30% — but still hasn’t returned to the higher levels PARA saw in the first quarter of 2023. However, a buyout from an industry expert could be exactly what shares need to finally turn around.

What’s Happening With PARA Stock?

After last week’s strong finish, PARA stock has struggled to regain its previous momentum. While the stock remains in the green for the week and for the month, Paramount will need another boost to get back to its peak price earlier this year.

A potential buyout may be exactly what the company needs for that to happen. After all, Skydance Media has worked well with Paramount before. The two companies have previously partnered on many highly successful film franchises, including the Mission: Impossible and Top Gun franchises. While Skydance did announce an important first-look deal with Apple (NASDAQ:AAPL) last year, Ellison clearly sees strong potential in Paramount.

What’s more, Shari Redstone is said to be considering the takeover bid. Redstone currently serves as President of National Amusements, the media conglomerate that owns Paramount as well as well-known entertainment names like MTV Networks and Nickelodeon. If Redstone chooses to sell Paramount, it could represent a significant shift for the entire media and entertainment space. The New York Times reports:

“Paramount, with its bundle of cable channels, a movie studio and its CBS broadcast network, has long been considered an acquisition target. Ms. Redstone began holding conversations about a deal earlier this year with parties including technology firms like Amazon, Apple and Netflix, according to two people familiar with the matter.”

Cut To: Next Scene

Ellison has done great things with Skydance, so it makes sense that he would want to further the company’s reach via a Paramount acquisition. After all, the studio is one of Hollywood’s best-known names. Indeed, the potential takeover could lead to a new super-company, which could in turn super-charge PARA stock. While this news could lead to struggling entertainment companies like AMC Entertainment (NYSE:AMC) taking a further beating, it should only be excellent news for investors in Paramount stock.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.