The new company trades at $9.37 with $75 billion of net debt. I model $3.2 billion of 2027 free cash after $6 billion of interest, which at 13 times supports $8.20, not today’s price.
Key points
- $75 billion of pro forma net debt sits on about $47 billion of equity at $9.37.
- $6.4 billion of 2025 pro forma net interest already exceeds my 2027 free cash of $3.2 billion.
- $10 billion of 2030 free cash is a 2030 goal, not a 2027 run rate.
The call
The $9.37 price treats the combined company as if 2027 cash already looks like a mid-teens multiple of several billion dollars. Pro forma 2025 sales were $66 billion, but the same exhibit shows a $6.1 billion net loss and $6.4 billion of interest. At 5.04 billion shares that price is $47 billion of equity on $122 billion of enterprise value.
I expect 2027 free cash of $3.2 billion after interest, content spend and integration cash. Thirteen times that cash, minus a small warrant drag, is $8.20. Linear advertising is still shrinking, the consent decree adds production spend, and one-third of the $6 billion synergy target in year one is not enough to cover the coupon stack.
Pro forma 2025 revenue vs 2027 FCF I model ($ billions)Pro forma Exhibit 99.2 Oct 6 2026; FCF is my 2027 estimate
Valuation
| Item | Figure |
|---|
| Shares | 5.04 billion |
| 2027 free cash (mine) | $3.2 billion |
| Multiple | 13 times FCF |
| Equity value | $41.6 billion |
| Warrant drag | $0.22 a share |
| 12-month target | $8.20 |
Thirteen times is a normal media cash multiple when leverage is 7 times 2027 EBITDA. If I am right the stock is 12 percent too high. If cash surprises to $4.5 billion the stock can hold $9. If cash stays at $2 billion it can trade near $5.
From $9.37 to $8.20: equity after leverageOct 8 2026 price; net debt from Oct 6 pro forma
Risks
- Synergies arrive faster than one-third in year one and streaming ARPU keeps rising; watch first combined EBITDA.
- Rates fall and the floating Term B loans cheapen interest by a billion dollars.
- A 2027 theatrical slate (Warner plus Paramount) beats the prior-year box office enough to lift FCF.
What would change my mind
A first combined report showing free cash above $1.2 billion in a single quarter after interest.