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Why the S&P 500 May Get a New Member Soon

1. Paramount Global's merger could disqualify it from the S&P 500 soon. 2. Current market cap is about $8 billion, below S&P's $22 billion threshold. 3. Skydance will own 70% of Paramount post-merger, reducing its float-adjusted market cap. 4. Recent speculation has led to a 17% decline in Paramount's stock price. 5. Inclusion in the S&P 500 can increase demand from passive investors.

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FAQ

Why Bearish?

The impending merger may render PARA ineligible for the S&P 500, hurting investor sentiment. Historical context shows stocks often decline significantly when removed from major indices, as seen with Hess.

How important is it?

The merger's implications directly affect PARA's market cap and S&P eligibility, influencing stock price.

Why Short Term?

The impact is immediate due to the merger's impending close and market reactions. Stocks often react quickly to index eligibility news.

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