Warner Bros. Discovery Media Company officially opens – Media Play News
April 11, 2022
The new media giant Warner Bros. Discovery on April 11 officially debuted as a publicly traded company at market open, with shares trading at $24 per share with a market capitalization of over $12.4 billion. Some analysts have a stock valuation target of $40 per share.
The $43 billion merger between Discovery and AT&T’s WarnerMedia business unit closed on April 8 with Discovery CEO David Zaslav assuming the role of CEO of Warner Bros. Discovery, which includes Warner Bros., HBO, HBO Max and Turner (TBS, TruTV, TNT, CNN), Discovery+, HGTV, Magnolia Network, Animal Planet, among other properties.
“I am confident that our collective energy and sincere love for these companies and brands will build the most dynamic media and entertainment company in the world,” Zaslav wrote in an April 8 memo.
Jason Kilar, CEO of WarnerMedia, Ann Sarnoff, CEO of Warner Bros., and Andy Forssell, boss of HBO Max, all left the company last week.
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Zaslav is said to have toured the company nationwide this week with planned stops in New York, Atlanta and Los Angeles – and a message that he intends to cut $3 billion in cost savings synergistic.
On Wall Street, analysts remain bullish on Warner Bros.’ fiscal outlook. Discovery, Geetha Ranganathan, senior media analyst at Bloomberg Intelligence, saying that subscription streaming service HBO Max is now among the top 4 SVOD platforms on the market.
“Ultimately, the HBO Max/Discovery product will be among the top four streamers, along with Disney, Netflix, and Amazon Prime Video,” Ranganathan told Yahoo! Finance. At the same time, some observers are worried about whether the new media company can turn a profit in the short term, including generating free cash.
Indeed, HBO Max, which ended 2021 with more than 73 million combined HBO subscribers, is expected to post a pretax loss of $1.5 billion this year.
“[Max] is at the very beginning of its growth curve,” Jessica Reif, research analyst at Bank of America, told Yahoo.