Warner Bros. Discovery Merger: How To Play The Three Scenarios

Max Greve4K FollowersFollow5ShareSavePlay(15min)Comment(1)SummaryWarner Bros. Discovery faces pivotal merger scenarios, with Paramount and Netflix as potential acquirers and a $24 fair value if deals collapse.Movie operating income recovered after a disastrous 2024, but 2026 may fall back as more questionable titles were shifted to this year from last. Dune is the only surefire performer.Streaming EBITDA is improving despite declining revenue, while the linear networks’ risk is neutralized via a spinoff that shifts future losses to bondholders.Any material drop below $24 presents a buying opportunity, but timing depends on the movie slate’s performance and merger developments. Jacek_Sopotnicki/iStock Editorial via Getty Images As Warner Bros. Discovery (WBD) prepares to report earnings later this week, I’ve been popping back in to check on the stock I sold out of at $24 last year. I noted at the time I might be aThis article was written byMax Greve4K FollowersFollowMax Greve is a graduate of Northwestern University with a quadruple major in History, Economics, Political Science, and International Studies. Max is a full-time writer and in addition to stock market trends also writes articles on government, current events, macroeconomic trends, and last but not least, the ongoing inefficiencies of professional sports.Analyst’s Disclosure: I/we have a beneficial long position in the shares of PSKY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.