Musk's reported $1bn Skydance investment equals 2% of its equity raise
Semafor reports that Elon Musk invested about $1 billion in Skydance Corporation. The amount is small relative to its financing, and the stake's value depends on a purchase price that has not been disclosed.
Elon Musk has reportedly put about $1 billion into Skydance Corporation, the company formerly called Paramount Skydance. The sum is small against its financing, and nobody has disclosed the price he paid.
What the investment reports disclose
Semafor reported the stake on Thursday, citing people familiar with the matter. It says Musk "has invested roughly $1 billion in Skydance". Paramount declined to comment, Deadline reported, and Musk had not said anything about it by that morning.
A second report also carried the roughly $1 billion stake, citing one person familiar, and credited Semafor with the first report. It got no immediate reply from Musk or Skydance. It says the commitment is part of a wider effort by Skydance to raise equity, according to Semafor.
Semafor gives no price for the stake, no date and no form of security. The money comes as the company looks to cut costs and bolster its stock price, it says. It says the deal came together at roughly the same time as equity from other investors, including a board member. It adds that it reported in September that Paramount was considering seeking an equity injection from Musk.
Both reports tie the money to cost cutting. The second report says Skydance expects $6 billion in cost savings over three years and faces a debt burden of nearly $80 billion. Semafor says Larry Ellison personally guaranteed more than $40 billion of the equity financing for the Warner Bros. deal.
Musk and the Ellisons have a history. Semafor says Larry Ellison, father of Skydance chief David Ellison, put $1 billion into Musk's 2022 deal to take X, formerly Twitter, private. He also invested in Tesla in 2018. David Ellison considered Musk one of several wealthy individuals he could work with.
Shares give back their initial gains
The shares rose on the report, then gave the gain back. SKYD touched $8.46 on Thursday, 7.5% above Wednesday's close, then closed at $7.79, down 1.0%, according to the SKYD quote page. They had risen 10.8% on Wednesday, to $7.87.
Volume reached 55.7 million shares, against an average of 22.0 million. The shares' performance over a month is weaker. The shares are up 7.30% over five sessions but down 22.95% over a month.
How the stake compares with the equity raise
Skydance raised $47.0 billion of equity on 6 October, according to its 8-K filing. The same day it closed its acquisition of Warner Bros. Discovery, and its name changed from Paramount Skydance Corporation to Skydance Corporation. The 8-K says the equity and note proceeds went to finance that merger, repay existing debt and pay fees.
Investors in the private placement, known as the PIPE, subscribed for 3,917,657,246 Class B shares at $12.00 each. The 8-K ties the placement to subscription agreements dated 27 February 2026. A board member bought 20,833,333 shares the same day at the same price, or $250 million, a Form 4 shows.
Those shares have lost value fast. SKYD closed at $9.53 on 6 October, the day the shares were issued, already 21% below $12.00. On Thursday it closed at $7.79, 35% below $12.00. The board member's $250 million is now worth about $162 million.
The sharpest fall came on 14 October. Yahoo's daily data show SKYD dropping 23.8%, from $9.27 to $7.06, the largest one day move of the past month. The data give no reason.
Musk's reported $1 billion is 2.1% of the $47.0 billion raise. His price is unknown.
The annual interest bill exceeds $3bn
Annual interest on the new notes far exceeds the reported investment. The 8-K reports $41.4 billion of dollar senior secured notes issued on 5 October. Secured notes are backed by pledged assets.
Of the $41.4 billion, $30.0 billion is first lien and $11.4 billion is second lien, which ranks behind the first. A EUR 885 million 7.000% tranche due 2031 sits alongside.
Principal times coupon gives about $3.2 billion a year on the dollar notes, an average coupon of 7.78%. Bank loans and fees are extra.
Second lien notes pay more. The dollar tranches carry coupons from 8.25% to 9.125%. They cost about $1.0 billion a year, against about $2.2 billion for the first lien.
Longer notes also pay more. The first lien 2028 notes carry 6.300% on $3.5 billion. The 2066 notes carry 8.900% on $1.25 billion.
The two 2031 tranches are the costliest lines. The second lien tranche costs about $495 million a year and the first lien about $458 million. Together they are 30% of the yearly total.
One billion dollars pays 3.7 months of that interest. That is 31% of one year's bill on the dollar notes.
The notes pay interest twice a year, according to the 8-K. Each payment is about $1.6 billion on the dollar notes. The reported cheque is about 62% of one such payment.
The cheque would cover the 2028 first lien notes, the shortest tranche, for 4.5 years. That tranche costs about $220 million a year. Semafor calls the money "a much needed financial injection".
The notes were issued on 5 October, so their coupons are already set.
Semafor ties the news to speculation about a Starlink partnership. It notes that Musk has publicly praised the Ellisons and Skydance. Cable investor John Malone spoke at the Paley Center on Tuesday. "I think there's a deal coming there," he said. That is his opinion, and no agreement has been disclosed. Malone also recalled that Larry Ellison helped Musk finance Twitter.
Semafor suggests a more immediate use for the money. It says David Ellison could use Musk's capital to support cost cutting and technology work. David Ellison has brought in Mattel's Ynon Kreiz as co-CEO. Ellison said in an interview earlier this month, "We are building a true product and tech team."
Skydance reports third quarter results on Monday 9 November, according to a company release. The price and form of Musk's stake have not been reported. That date is the next point at which the company can address Semafor's report.