Key Stats for Warner Bros. Stock
- Yesterday’s Price Change: -3%
- Current Share Price: $9.50
- 52-Week High: $12.50
- WBD Stock Price Target: $14
What Happened?
Warner Bros. Discovery (WBD) shares fell almost 3% on Monday following the company’s announcement that it plans to split into two separate public companies by mid-2026.
The media conglomerate will be divided into two companies: a streaming and studios company, which will include HBO Max and movie properties, and a global networks company that will house CNN, TNT Sports, Discovery, and other traditional TV assets.
CEO David Zaslav will lead the streaming and studios division, while current CFO Gunnar Wiedenfels will become CEO of the global networks business.
The move represents the latest major restructuring in the media industry as companies grapple with the ongoing shift from traditional cable TV to streaming platforms.
The announcement follows similar moves by Comcast, which is spinning off its cable networks portfolio into a new company called Versant.
WBD’s decision comes after it reported a massive $9.1 billion write-down on its TV networks business last year, highlighting the challenges facing traditional pay-TV operations.
See WBD’s full analyst estimates, earnings results, and earnings transcript (It’s free) >>>
What the Market Is Telling Us About WBD Stock
Despite the market reaction to WBD stock, investors should view the split as a strategic move that could unlock value by allowing each business to focus on its core strengths.
The separation addresses a key investor concern about the drag that declining traditional TV networks have placed on the company’s streaming ambitions and overall valuation.
By splitting the businesses, WBD aims to provide investors with clearer visibility into the performance and growth prospects of each operation.
The streaming and studios entity can focus entirely on building HBO Max and competing in the streaming wars. At the same time, the networks business can concentrate on maximizing cash flow from its still-profitable traditional TV assets.
However, investors will be watching closely to see how the company’s substantial debt load, currently just below $34 billion, is divided between the two entities.
Management indicated the majority of the debt will remain with the global networks business, which generates significant free cash flow to service that debt.
The move also positions both companies for potential future deals, as industry consolidation continues amid what Zaslav calls “generational disruption” in media.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
