What Happened?
Shares of global entertainment and media company Warner Bros. Discovery (NASDAQ:WBD) jumped 3.2% in the afternoon session after reports revealed that streaming giant Netflix made a mostly cash offer to acquire the company.
The bid was part of a second round of offers for the TV and film group, with other suitors including Paramount Skydance and Comcast also submitting revised, binding proposals. According to reports, the bids were placed before the Warner Bros. Discovery board, signaling the sale process was moving into its final stages. Netflix's offer was reportedly for the company's studio and streaming assets. This development fueled market expectations for an acquisition, boosting investor confidence and sending the company's stock to a new 52-week high.
After the initial pop the shares cooled down to $24.44, up 2.4% from previous close.
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What Is The Market Telling Us
Warner Bros. Discovery’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock gained 3.5% on the news that reports indicated that several media giants, including Paramount, Comcast, and Netflix, were preparing bids to acquire the company. According to The Wall Street Journal, Warner Bros. Discovery formally launched a sale process and set a November 20 deadline for first-round, non-binding offers, with the goal of finalizing a deal before the year's end. This development followed the company's disclosure that its board had started a review of its options after receiving unsolicited interest from multiple parties. The potential bidding war signaled strong interest in the media conglomerate's assets, which include HBO, CNN, and the Warner Bros. movie studios.
Warner Bros. Discovery is up 129% since the beginning of the year, and at $24.44 per share, has set a new 52-week high. Investors who bought $1,000 worth of Warner Bros. Discovery’s shares 5 years ago would now be looking at an investment worth $861.61.
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