WBD

infinit9

Hey, why is WBD trading below $27 when the stock acquisition was approved by shareholders at $31? Are some people still betting that the merger wouldn't go through?

Bagholder147

He leveraged Oracle so his son could buy WBD .

its_probably_wine

Any thoughts on the WBD/PSKY $110B merger that was approved yesterday? Not much movement on either ticker. Is it priced in already? Can’t be…but is it? Figured it was an easy calls play but it’s super boring PM.

callmecrude

In some instances I would agree. However Paramount wasn’t the only buyer here. Netflix already set a floor price of $27.75 for WBD, and that’s without the additional $7B cash they’d be getting.

nevyn

> If the deal falls through then WBD receives $7B cash (10% yield). As a normal investor you won't see any of this. What'll happen is your shares will tank, and you'll lose piles in the short term or maybe it'll eventually recover a bit and you'll lose a smaller amount over a longer time period.

callmecrude

There’s currently a 13.4% yield on buying WBD and holding to the expected merger close date (32.2% annualized yield). If the closing date is extended then you’re paid an additional 4% yield in perpetuity. If the deal falls through then WBD receives $7B cash (10% yield). Anyone else playing this?

Practical-Bet-6561

What hall think about WBD n shi, we getting $31 or nah

wizards-hat

$LION poison pill ends May 7th. A buyout is incoming for Lionsgate Studio in my opinion once available for purchase. The company has been positioned to be acquired similar to $WBD $nflx $sony $appl $amzn Lionsgate CEO has Vesting Tranches: These options are split into three tranches that only vest if the stock hits price targets of $17.50, $20.00, and $22.50 $lion stock could easily be 2x in my opinion Let’s go! 🦁

wizards-hat

$LION poison pill ends May 7th. A buyout is incoming for Lionsgate Studio in my opinion once available for purchase. The company has been positioned to be acquired similar to $WBD $nflx $sony $appl $amzn Lionsgate CEO has Vesting Tranches: These options are split into three tranches that only vest if the stock hits price targets of $17.50, $20.00, and $22.50 Let’s go! 🦁

wizards-hat

$LION poison pill ends May 7th. A buyout is incoming for Lionsgate Studio in my opinion once available for purchase. The company has been positioned to be acquired similar to $WBD $nflx $sony $appl $amzn Lionsgate CEO has Vesting Tranches: These options are split into three tranches that only vest if the stock hits price targets of $17.50, $20.00, and $22.50 Let’s go! 🦁

stalkerzzzz

The 76 expectation did not include the 2.8 billion from WBD. When you adjust the 1.23 EPS they actually missed that expectation.

stalkerzzzz

They beat the expectations by that much because of the 2.8 billion they received from WBD, not because the business was doing that great.

wizards-hat

Load up on Lionsgate Studio ($LION). Netflix ($NFLX) could view it as a potential acquisition candidate now that Paramount bought ($WBD). $LION has a hit movie coming out this week that likely will exceed a billion dollars in my opinion. $LION Low market cap Low float Large amount of IP

inittoloseitagain

I owned WBD for a year - sold it for 100% gain…the week before the Netflix bidding war began.

Benz_Coinz

Free cash flow over 5B. The stock was punished when it was going to buy WBD, now they're punished again for not? Who cares if Reid steps away from the board. Stock is going to $120

Incorgnitos

But for the WBD deal fees, they would have missed EPS.

BrushTraditional3324

They missed on GAAP EPS They missed on revenue in US and Canada The 2.8 billion WBD breakup fee helped this quarter. They stopped reporting on quarterly subscriber growth (priced in)

Fiscal_Fidel

"Falls on Hastings Exit" is a misleading title. It mostly fell because of weaker earnings and weaker guidance. If the WBD buyout is normalized out, then these earnings were not stellar

BrushTraditional3324

Subtract the WBD breakup fee from eps and tell me if the numbers still look good. They missed on GAAP. They don't disclose subscriber growth quarterly anymore. They missed on US revenue. What am I missing.

BrushTraditional3324

Subtract the WBD breakup fee from eps and tell me if the numbers still look good. They missed on GAAP. They don't disclose subscriber growth anymore. And they missed on US revenue. What am I missing.

fudge_mokey

Does that EPS beat include the one time payment from the WBD/Paramount deal?

nonresponsive

Unironically, if they did announce they were getting into the datacenter business or something, that could prop up the stock a bit. They were willing to pay a premium for WBD content for a reason. But as of right now, they don't look like they have anything big coming on the horizon.

Much_Candle_942

He also told them to drop out of WBD bidding war, and get a windfall lottery of $3B. Was hoping the results would reflect that BIGLY! But nada..

GideonWainright

WBD, which would have been a mistake.  WB is a cursed asset.

UpstairsCheetah235

Next quarter is under expectations and doubling likely includes some one-off expenses (WBD breakup fee?)

Dstein99

I haven’t looked into the numbers but I heard the reported EPS includes the WBD breakup fee.

KaramTNC

As long as I dont check, I wont know xD. The only thing that helps me here is the fact that Im looking at the long term here. Netflix has been very strategic with their business and have accumulated huge cash reserves. They may not have gotten WBD but I believe that was fully intentional on their part to make Paramount overpay for WBD and take on their debt + debt for the money they had to borrow to buy WBD. If paramount buckles under the pressure, Netflix might end up buying both of them for much cheaper than their original proposal.

JellyfishFestival

I think it's interesting how PSKY has been on a tear the last couple weeks after selling off big time on the WBD deal. Meanwhile WBD languishes like a lump on the deep sea floor with a huge arb spread for a deal supposedly closing in a few months. Reading between the lines I see a market pricing in a growing likelihood of 'no deal' at some point. Even as a likely yes vote from shareholders nears.

WickedSensitiveCrew

Not sure why you lumped in Netflix. They tanked for an obvious reason they attempted to buy WBD. As soon as they pulled out stock went up.

TAKINAS_INNOVATION

The WBD deal was so dumb. I don’t know if they were serious or just trying to troll paramount.

Greenzombie04

Nflx likely flying higher after earnings which means it won't. The stock is down $20-30 from before the WBD deal that sunk it. Since then it hasn't fully recovered but got cash from Paramount and raised prices. Stock buyback will likely be announced since it was suspended to buy Warner.

wakaWear

!Banbet $WBD 29 17d

Financial-Pianist-44

The projection numbers are insanely optimistic. Both WBD and PSKY lose money over the years. There is a reason why combined market for both is a <100 bil while nflx market cap is 500 bil. Margins don’t magically improve because of “synergy”. If anything WBD exec heads are notoriously problematic and its negative synergy. There’s a reason why WBD bounces around acquisitions. Tldr, your position can pump on news and short term catalysts. Sell your options then dont hold leaps

ai-moderator

#TLDR --- **Ticker:** PSKY **Direction:** Up **Prognosis:** Buy Shares (around $11.77) & LEAP Calls **Catalyst:** WBD Merger Approval (Expected April 23rd) **Primary Risk:** Imminent World War III mmmmkay

ai-moderator

#TLDR --- Ticker: PSKY Direction: Up Prognosis: Buy shares (OP is in at $11.77) and LEAP Calls before April 23rd. Catalyst: Regulator approval for the WBD merger and relying on "Daddy Ellison's" Oracle money to handle the $79B debt load. Math Strategy: Charlie Kelly conspiracy board (verified by AI). Primary Risk: World War 3 (bad, mmmmkay).

SouthKen2020

He’s putting the company in play. If we’ve learned anything from WBD, it should be that the first offer isn’t the best. Also, AI music fears overblown IMO. 75%+ of Spotify consumption is catalog music.

ShadowLiberal

If you own them through an ETF then the ETF's fund manager votes for you. If you own the individual shares then you get to vote on them. I asked Gemini about the ownership of WBD shares, and the numbers it gave me were: * Institutional ownership - 71% to 72% * Retail / General Public - 23% to 24% * Insiders - 5% to 6% If that's accurate then some of the institutions like Fidelity/Vanguard/etc. would have to vote against the deal.

Dstein99

I don’t own any shares so it doesn’t matter but WBD was $12/share before the deal, without the deal the price may not go all the way back down to $12, but it won’t stay at $27 and it certainly won’t go up to $31. I don’t think Paramount can compete without the acquisition which is why they were so aggressive in their bidding process. Over the past 2 years Paramount’s revenue has been flat declining by 2.5%. This looks like a Spirit Airlines situation where the FTC did not allow Spirit to be acquired because that would eliminate competition and Spirit was not able to survive and declared bankruptcy. The government wanted to keep competition and they won, so they got less competition and more layoffs than if the acquisition would have gone through. Paramount has tens of thousands of employees so it could be a situation that if the deal doesn’t go through tens of thousands of employees could lose their jobs anyways. The combined company would be a third viable competitor to Disney and Netflix benefiting the consumer rather than having 2 separate companies unable to compete with the big dogs.

Sufficient_Ad_2590

The stock would get higher for WBD if the break up fee happens. Why not get money and save jobs?

ShikaStyleR

I'm not even a shareholder of WBD, but I'm an accountant, and I know how to read financial statements 

switch8000

Only one more month till I can sell all my WBD winnings as a long, and get out of this stupid acquisition.

traderbusto

McKinsey charged WBD $55 million in consulting fees to rebrand HBO to HBO Max, $37 million to shorten HBO Max to Max, and $63 million to revert the name back to HBO Max. Why am I even going to work today?

reaper527

> I don’t think there’s anywhere else to go for this company but down anyone buying it is basically going all in on a buyout (similar to what happened with WBD). they have desirable IP's so it's not completely off the table as a possibility, but it's equally possible (if not more probable) that they enter bankruptcy, the shareholders get nothing, and the IP gets sold in bankruptcy like what happened with thq/midway/acclaim.

WinstonSalemSmith

Internet/Social Media investors are not generally interested in the easy money. This distinguishes them from people like Buffet or old school retail investors who just say OK there is an oil war in the Middle East I will buy oil stocks. Social Media people will do nothing or buy puts, based on the correct assumption that oil prices will decline at some point. But when? These people also don't touch things like WBD at $20 during a bidding war or NFLX below $100 today. These are just boring money making trades, but not real conversation starters. Long XOM XLU AMLP SFL April/May calls on OILK Puts on JETS

Portland_st

In 5 years, Netflix will be able to buy both Paramount and WBD for less than half of what they offered for WBD.

HunterMichael92

Congrats! I'm up as well net overall, some big swings these past 3 weeks, but its amazing that retail investors are selling this "specific" stock with broader market as it heads into what could be the best swan song for a media company in recent time. Far outpacing WBD in terms of share price movement from $6 and up. My max allocation will be 75-80% of my portfolio. I see $LION as a sure bet these days compared to just buying index funds and overvalued tech stocks. Media companies need massive libraries to keep viewers engaged, and locking up $LION and letting streaming deals expire at all competitors creates something truly inimitable.

dtlabsa

If Netflix purchase of WBD wasn’t approved, or if they walked away from the deal, they would have had to pay WBD $5B.

Cav829

At the rate PSKY is going, Netflix is going to get a buy 1 get 1 free deal on them when they get WBD in the end anyway.

unholy-confetti

Puts on WBD for raceswapping Snape

tokin_and_quotin

Sorry if I worked you up with what I said, brother. Also I was referring to multiple companies, not just Palantir. And I'm not saying they are going to crash and burn. In fact I'm sure they will be just fine. I'm saying they might struggle a bit more when the current administration is gone. Trump has very publicly provided support and preference for these companies. For example, consider the TikTok takeover, the recent lawsuit between Paramount Skydance and Netflix over WBD, or the strange Tesla car show on the White House lawn last year. The next administration will likely just be more neutral. And if that's too politically biased for you, then you _really_ need to loosen up.

tokin_and_quotin

Sorry if I worked you up with what I said, brother. Also I was referring to multiple companies, not just Palantir. And I'm not saying they are going to crash and burn. In fact I'm sure they will be just fine. I'm saying they might struggle a bit more when the current administration is gone. Trump has very publicly provided support and preference for these companies. Just look at the TikTok takeover, the lawsuit between Paramount Skydance and Netflix over WBD, or the Tesla car show on the White House lawn last year. The next administration will likely just be more neutral.

No_Translator_6673

But isn't that the very reason why Larry Ellison had to come to the table - i.e. to basically underwrite the cost of the WBD acquisition? So, they aren't dependent on the existing lenders for finance?

BlackSheepInvesting

Finding assets that are overvalued is not hard, just search random tickers and it's like shooting fish in a barrel. As for undervalued securities or assets, I think in SaaS right now, the mania is swinging the other way, and some of the companies do seem interesting. Plenty of value traps in there too though. ADBE is very interesting. I actually made a video on them on my channel, and will be making another one this coming week or two hopefully. They're buying back serious shares at these levels. CROX is also super interesting. People seem to think HeyDude failing = Crocs failing, and I just don't see it at all. The valuation is absurd and they're buying back shares like mad. I was long WBD, but now that they are getting acquired by PSKY, I'm out. I don't think there's value there in the combination to drive outsized returns from current prices. I'd be interesting in what undervalued companies or sectors are 'hot' right now (in a bad way haha). It just seems everywhere you look, there's mania on the bull side and I'm having lots of trouble finding value.

HunterMichael92

Very simply, if you back out one time revenue factors and you look at $LION as a arms dealer of content to the largest streamers of the world, it sits at approximately $1.1 billion on evergreen and licensable content. Now that Starz is separated, LION has a backlog of upcoming releases already baked into debt which is going to be paid down significantly in their FISCAL year 27 (their fiscal year is ahead of the calendar year). Estimates based on just MICHAEL alone show a debt load going sub-three billion by 2028 (per analyst & earnings conferences). Now you take a company with $2.5-3bn in debt, a library value of $1bn+ a year, and pricing power that a single streamer could let all deals expire an bring a massive title library into their own fold, lets call it 8-10x revenue, having the company be worth without future film value, and production value, rougly $7 billion excluding debt. Warner Brothers just traded at a 22x Library Revenue, I applied a 50+% discount to account for the IP value in addition to pure library value, and other licensing/broadcasting rights that WBD owns. WBD prices their networks at essentially a nominal value, and a majority of the value on the massive IP library they already have created, like LION, the value is in the content that already exists. Simply put, on acquisition, I see a bidding war simply because LION already owns a significant chunk of content that exists on many competing platforms, but a single platform can own this library for their own massive long term benefit.

Totallycomputername

The WBD bid showed they have been looking to expand beyond standard streaming. I hope they find some success 

Capital6238

> WBD Why would he? WBD is not even profitable. VR was always a bet to become less dependent on Alphabet and Apple. While Meta is super profitable, their entire business model depends on Android and iOS. Some privacy changes on iPhone cost them billions before. Trying to own a platform failed, but I see the logic behind it.

C001H4ndPuk3

Enough that he could have bought WBD.

URWorthLoving

So paramount paying for WBD to break contract with Netflix is buying Netflix this studio and they still have 2.2bil left over?

OptionsandOptions

WBD lotto puts for tomorrow could pay out 🤞

OptionsandOptions

WBD lotto puts for tomorrow could pay out 🤞

Hamzehaq7

tbh, i think it’s a combo of factors. the regulatory approval worries are definitely a big one, like you mentioned. also, WBD's been kinda shaky overall, with the market not fully convinced about their growth plans. and let’s not forget the whole streaming wars vibe messing with valuations. it’s like the market doesn't really trust the future, you know? just depends on how things shake out with the CBA for the WNBA too, that could bring some positive vibes, but right now it's a bit of a wait-and-see game. what are you thinking, holding long or looking for dips?

WickedSensitiveCrew

WBD was about to split the linear from streaming. Along with putting majority of debt on linear. Didnt want to give a debt free or limited debt S&S a shot to be rerated.

DecembersDragons

PSKY - they just paid way too much for WBD. Cable is dying, theater is anemic, and streaming won't make up the difference.  They do have a better product now true - but not 90 billion of debt better. 

callsonreddit

NFLX uses WBD breakup fee to acquire Affleck..

OptionsandOptions

APP puts and WBD PSKY lotto puts

AntoniaFauci

NFLX just quietly melting since the pop after abandoning the WBD circus. Down 6% a little per day.

arbyman85

They need a $16.02 price on PSKY to even get the lenders to agree to the deal, since the bonds have to be re-sold. A junk bond with Debt-Equity ratio below that would instantly wipe out any ability to sell the loans and leave you insane default insurance and exploding yields. If there’s not enough stability to turn pensions into bag holders, there’s no deal. That $16.02 share backing by Ellison is only there because it’s where stock needs to be to close the deal. David Ellison was trying to meme PSKY to the acquisition and it failed miserably. Credit default swaps now make it impossible to close the deal. WBD is screwed on share price ultimately.

Walking72

YouTube now generates more ad revenue than Disney, NBC, Paramount, and WBD — combined

Individual-Habit-438

ORCL's beat is mildly bullish for the WBD - PSKY merger closing

Ancient_Plantain8022

I know little about the stock market, but I never want to sell my (inherited) shares to Ellison. Just studying the proxy statement from WBD re: Netflix, and not sure how to vote on this either....? I usually just ignore the proxies :-/

callmecrude

Honestly, this is a great buy. Normally there’s 2 major risks that cause potential acquisitions to trade below their buyout value: the time-value of money and the risk of the deal falling apart which craters the stock. Neither of those risks really exist for WBD imo. There’s currently 11% upside and 6 months until the acquisition needs to close. After September 30th, Paramount has to pay ~$650M to WBD shareholders each quarter as a ticketing fee. This eliminates the time value issue, as you’re already getting a 20%+ annualized yield if you buy at these prices, and you’re being compensated if the timeline is extended. In terms of the deal collapsing, Netflix was offering $27.75 per share which is basically where the stock is already trading. Meaning there isn’t really any downside compared to what competitors will pay if Paramount backs out. On top of that, Paramount has also agreed to a $7B breakup fee if the deal collapses due to regulatory issues, which is a 10% cash yield. This feels very similar to the ATVI arbitrage that happened a few years ago when Microsoft bought them out. You get a 20%+ annualized yield on a company which either gets bought out or gets a massive cash injection.

WickedSensitiveCrew

Bought NFLX and LION instead of PSKY during the WBD bidding war. I dodged a bullet.

WickedSensitiveCrew

PSKY roundtripped from the WBD acquisition news pump is it a buy? I bought NFLX and LOIN during the WBD bidding war. Not sure if PSKY is at an entry point now.

Top-Ad4900

So how can they afford WBD now too?

greenpride32

The spread in the current price and buyout price is parts risk (will the deal actually go through) and parts opportunity cost. If you continue to hold WBD today, let's round up to $28/share for simplicity, well absolute best you can do is $3 profit or about 10.7%; that is the ceiling. This deal could take months or possibly year plus. The SP500's annual average return with dividends reivnested is a little over 10%. So by holding WBD, and let's assume the deal takes 1 year to close, you're just matching the SP500 return. Opportunity cost simply means, there will be many who would rather take the money out of WBD, and use it to try and capture a larger profit margin. As the deal closing date approaches and as risk erodes, you will start to see the share price slowly creep to $31. That's because the opportunity cost of the money declines with the time window. I have a year to beat 10%, or I have 3 months to beat 7% or I have 1 month to beat 3% etc. Same pattern plays out for any buyout. If you see something else it means the deal was at risk for whatever reason (another bidder, regulatory approval threat). MSFT and ATVI was an example that bounced all over the map due to regulatory issues. IBM and HCP followed standard playbook.

iXProject

Priced in risk for the merger to fall apart. IMO waste of time and asymmetric risk to downside. Ignore WBD and I would sell if you have it.

Three_of_a_kind3515

Which other minds can you read? Is it just Chinese minds, I want to know what David Ellison is thinking by buying all the assets of WBD and financing the 2.8 billion dollar payment to NFLX for the break up fee.. those aging cable networks are going to drain him. His debt ratio is already in question and he owes his Dad 50 billion dollars now..

kalakesri

What happens if Larry Ellison goes bankrupt before the WBD acquisition. Calls on NFLX

Wowmuchrya

It is possible, but investors care that Ellison is also now backing a shitty WBD deal with his own (and Oracle’s) money as collateral. Oracle essentially has no fcf due to this, although they’ll actually never admit that on the books you have to read in between the lines.

Zealousideal_Look275

Ellison buying WBD is a classic red flag 

Zealousideal_Look275

On the flip side Ellison buying WBD is a classic red flag 

Zealousideal_Look275

Oracle stock would be the collateral for the loan to buy WBD. This was part of the reason why WBD kept turning down his offer, even though it was for more money. Netflix’s check would cash while the Ellison’s offer was dependent on complex financing 

Greenzombie04

I want Oracle to crash and burn so Paramount has to be like we can't buy WBD now.

geelinz

And Netflix buys WBD and Paramount.

Bright_Albatross649

it would be fucking funny if the WBD deal caused oracle to go bankrupt and pop the ai bubble

Bright_Albatross649

i mean when your kid throwing billionaire son tantrums for almost not getting WBD and the fucking bankers are dumping your debt, makes sense to chill for a bit

calm_discussion_3500

I was very upset as a NFLX holder as it seems fairly clear (to me anyway) they were muscled out due to political connections, not price. NFLX has the balance sheet and people to really utilize WBD. I've had nothing but terrible experiences with the Paramount app. They have the worst tech and management in the business it seems. If they do more censorship it's not going to be popular with customers either. That all said, the thing they do have going for them is that they just knocked out a really big competitor and the field is thinning.

ComprehensiveKiwi489

Paramount and WBD both have studios and news stations, which means they have a lot of duplicative employees, which can be reduced. They think they can get to $6B in annualized savings once merged and cost savings are done. The question is whether they can execute that.

WickedSensitiveCrew

They their reported their Q4 earnings just a couple weeks ago. Apollo is not heavily dependent on software valuations.. They invest more in: industrials, credit, infrastructure, and insurance assets. They recently started buying into sports teams. APO most recent credit deal in the news was helping Paramount fund its acquisition of WBD.

the_mind_goblin1

Larry needs to use that cash to finance his WBD purchase

jwilliams35

after months in a downtrend, NFLX will grind higher every day, 0.5% at a time. $105 by March 20th. That's where the WBD breakdown started.

Zealousideal_Look275

More like needing to come up with the money to over spend on WBD

barbpatch

AMD. I've made a modest amount of realized profit this year by just buying when it's below $200 and selling when it's above $200. I think by summer AMD will run again, but this ><200 limbo has been going on for a while now GLXY depending if you think crypto will start to recover. If you think further tanking is ahead then wait. HOOD, same deal as GLXY. I'm heavy in PSKY too and I think it will run again when the WBD deal closes but its been a lot of pain 😬

chiswis

WBD cash crunch

cwhmoney555

Gotta pay for WBD somehow

TheMericanIdiot

Junk is an understatement! Save this comment I guarantee you trump admin will give them tax payer money in some way, with tax breaks or some bs government contracts that will pay them out billions in exchange for killing WBD news sources.

NeotroO

That WBD merger needs to repayed.

FuckingJPMAlgos

Or should we say the WBD buyout is taking its toll on daddy's empire.

Soberdonkey69

I thought these tech companies kept saying that AI would bring more jobs. Also, he now needs to fund his son’s purchase of WBD, so I hope the shares tank even more.

Individual-Habit-438

I think WBD is a nice buy as it appears to set a floor at 28. If you want something low risk that can go up 10% over the next 6-12 months it's a good buy with a very high chance of closing at 31.