April 11, 2022
The new Warner Bros. Discovery media giant April 11 officially began as a publicly traded company when the market opened, with the stock trading at $24 per share with a market capitalization of more than $12.4 billion. Some analysts have a stock valuation target at $40 per share.
The $43 billion merger between Discovery and AT&T’s WarnerMedia business unit closed April 8 with Discovery CEO David Zaslav assuming the CEO position at Warner Bros. Discovery, which includes Warner Bros., HBO, HBO Max and Turner (TBS, TruTV, TNT, CNN), discovery+, HGTV, Magnolia Network and Animal Planet, among other properties.
“I am confident that our collective energy and genuine love for these businesses and brands will build the world’s most dynamic media and entertainment company,” Zaslav wrote in an April 8 company memo.
WarnerMedia CEO Jason Kilar, Warner Bros. CEO Ann Sarnoff and HBO Max boss Andy Forssell all exited the company last week.
Zaslav reportedly is making the rounds across the company nationwide this week with stops planned in New York, Atlanta and Los Angeles — and a message how he intends to trim $3 billion in synergistic cost savings.
On Wall Street, analysts remain upbeat about the fiscal prospects for Warner Bros. Discovery, with Geetha Ranganathan, senior media analyst at Bloomberg Intelligence, contending the HBO Max subscription streaming service is now among the top four SVOD platforms on the market.
“At the end of the day, the HBO Max/Discovery product is going to be in the top four streamers, along with Disney, Netflix, and Amazon Prime Video,” Ranganathan told Yahoo! Finance. At the same time, some observers worry whether the new media company can turn a near-term profit, including generating free cash.
Indeed, HBO Max, which ended 2021 with more than 73 million combined HBO subscribers, is expected to generate a $1.5 billion pre-tax loss this year.
“[Max] is at the very beginning of its growth curve,” Jessica Reif, research analyst at Bank of America, told Yahoo.