Elon Musk Invests $1 Billion in Skydance Stock. He Could Be Setting the Stage for a Major Starlink Deal.

Just three weeks after Paramount closed its giant purchase of Warner Bros. Discovery, word spread that Elon Musk had written a very large check.

Semafor reports that Musk has invested roughly $1 billion in Skydance (SKYD), citing people familiar with the matter. Neither Musk nor Paramount answered the outlet's requests for comment.

Valued at a market cap of $38 billion, Skydance is now one of the biggest media companies in the world. It is also carrying a mountain of debt.  

So why would Musk want in? And what could it mean for shareholders?

Elon's $1 Billion Bet on Skydance

Semafor says the Musk deal came together at about the same time as equity investments from other investors, which include board member Laurene Powell Jobs. It said in September that Paramount was weighing an equity injection from Musk. He was one of several wealthy people CEO David Ellison considered.

The cash infusion will help to support cost-cutting efforts and also provide it with a stock price lift. For scale, the Warner Bros. Discovery deal itself came with $47 billion in new equity and was priced at $12.00 per share. 

Musk and David Ellison's father, Oracle (ORCL) founder Larry Ellison, have long been close. 

Semafor claims that Larry Ellison's money and connections helped make the Warner Bros. takeover possible. Ellison has personally guaranteed more than $40 billion of the equity financing.

Notably, Ellison also invested $1 billion in Musk's 2022 deal to take X, formerly Twitter, private. He also invested in Tesla (TSLA) in 2018 and served on its board for years.

Billionaire cable executive John Malone drew a line between the two men at the Paley Center, according to Semafor. He pointed out that Ellison helped Musk finance Twitter. Ellison, he said, then raised some of the money he put into creating Skydance from Tesla stock.

Malone said he would not be surprised if an announcement came soon. “I think there’s a deal coming there,” he said. He was pointing to a possible tie between Skydance and Musk’s Starlink satellite network. He also said the channels will need to be reworked into streams.

Where the Money Could Go

Semafor says Ellison could use Musk's capital to bolster cost-cutting and tech efforts. Ellison also hired Ynon Kreiz away from Mattel (MAT) to share the chief executive role.

Ellison spoke about the plan in a CNBC interview earlier this month. "We are building a true product and tech team," he said. He also described artificial intelligence as a tool for artists. 

Paramount raised its run rate efficiency target from $2 billion at deal announcement to more than $3 billion. It is on track for more than $2.7 billion by the end of 2026, according to the company's investor presentation.

The company is merging the tech stacks for Paramount+, Pluto TV, and BET+ into one platform. It also aims to move the whole company onto a unified ERP system, which is software that runs core operations, by early 2027.

The bigger target is $6 billion in run-rate synergies within three years. The company expects 30% in year one and 70% in year two. Most of the savings should come from technology, integration and procurement, marketing, and real estate. 

The Debt Behind the Headline

On a pro forma basis, Skydance has total debt of $86.8 billion. After subtracting $7.9 billion in cash, net debt is $78.9 billion. 

Management has set goals to shrink that load. It wants net leverage of 3.75 times in 2028 and 3.0 times in 2029. Leverage compares debt to earnings, so a lower number is favorable. 

The company also expects more than $10 billion in free cash flow by 2030, even as it plans to keep spending more than $30 billion a year on content. 

What SKYD Stock Investors Should Watch

The business Musk is reportedly backing has real scale. Paramount+, HBO Max, and Discovery+ together count more than 200 million streaming subscribers.  Momentum at Paramount+ is also building. It has about 82 million subscribers, and revenue rose 16% year over year in the second quarter of 2026. 

Total company adjusted EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization, grew 42% in the first half of 2026.

Three things matter next:

• Confirmation: Semafor relied on people familiar with the deal. Neither side has commented.
• A Starlink link: Malone expects an announcement. Nothing has been confirmed.
• Synergy pace: Hitting the 30% target in year one will show whether the cost plan is working.

The story is still unfolding. A famous investor can lift attention, but debt targets and savings will decide how SKYD shares fare. 

Out of the 23 analysts covering SKYD stock, two recommend “Strong Buy,” two recommend “Moderate Buy,” 12 recommend “Hold,” one recommends “Moderate Sell,” and six recommend “Strong Sell.”

The average SKYD stock price target is $9.68, above the current price of $7.49. 

On the date of publication, Aditya Raghunath did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.