Heres how the smart money on Wall Street sees Paramounts antitrust battle with California

The bets on Wall Street are stacking up in favor of David Ellison in his battle against California Attorney General Rob Bonta, On The Money has learned.We’re talking about a subset of the trading community known as the “arbitrageur,” or arbs for short.These aren’t the meme touts who get their research from Reddit posts and have gotten slaughtered rolling the dice on speculative stocks while embracing weird conspiracy theories about dark forces tanking their inept investments.Rather, these are the smart money types at hedge funds and on Wall Street trading desks who make bets based on reliable sources.

The wagers are largely around the outcomes of mergers – whether deals will survive investor pressure or regulatory challenges, as in the case of Ellison’s bid to buy Warner Bros.Discovery and merge it with Paramount Skydance.These so-called “merger arbs” have grown increasingly confident in recent weeks that Bonta will soon settle with Ellison, rather than using the nuclear option of taking him to court before what appears to be a lefty, anti-deal federal judge who could rule against the merger and add another level of uncertainty to its future.Scary stuff for Ellison, though not so scary according to the arb community, which have recently bid up shares of the target company back nearly to levels when the deal was announced.Recall, Ellison agreed to pay around $81 billion, or $31 a share, for Warner Bros.

Discovery.Trading desks bid up the stock – pending federal and foreign regulatory approvals – to $30 a share since it didn’t officially close yet.The Trump antitrust cops saw no monopoly potential in a merger of two struggling companies that face various existential threats: cord cutting and movie attendance that never recovered from pre pandemic levels.

Throw in the new competition for entertainment eyeballs from Big Tech and you know why the deal also was OK’d by overseas antitrust cops.Enter Bonta and his merry band of leftist (and antitr...