Warner Bros. Discovery Hits 1-Year High On New Corporate Structure: Retail Applauds Strategic Shift

Media and entertainment company Warner Bros. Discovery, Inc’'s ($WBD) shares rose to their highest level in a year after the company announced corporate restructuring to capitalize on evolving strategic opportunities. 

The New York-based company said its board has authorized the company to implement a new corporate structure to “enhance its flexibility and create potential opportunities to unlock additional shareholder value.”

Under the new corporate structure, Warner Bros. Discovery will serve as the parent company for two operating divisions, namely “Global Linear Networks” and “Streaming & Studios.”

The Global Linear Networks segment will include the company’s legacy cable business, which operates its networks such as TNT, CNN, TBS, Food Network and HGTV. 

On the other hand, the Streaming & Studios segment will be a globally scaled streaming platform, and short film and entertainment studios. This will involve the merger of the Max and Discovery+ streaming services and HBO, along with its Warner Bros. movie and TV production operations.

CEO David Zaslav said, “We continue to prioritize ensuring our Global Linear Networks business is well positioned to continue to drive free cash flow, while our Streaming & Studios business focuses on driving growth by telling the world's most compelling stories.”

“Our new corporate structure better aligns our organization and enhances our flexibility with potential future strategic opportunities across an evolving media landscape, help us build on our momentum and create opportunities as we evaluate all avenues to deliver significant shareholder value.”

The company said it expects to start the foundational steps immediately and complete the implementation by mid-2025.

Warner Bros. Discovery’s cable TV business has suffered, in line with the media industry trends, as consumers continue to cut the cord and advertisers shift their ad dollars to digital media. 

On the other hand, the streaming business is thriving, as it had 110.5 million subscribers at the end of the third quarter.

WBD sentiment and message volume December 12, 2024, as of 1:36 pm ET | Source: Stocktwits

Sentiment toward Warner Bros. Discovery stock improved from ‘neutral’ a day ago to ‘extremely bullish’ (92/100), the highest in more than a year. The corporate restructuring set retail tongues wagging, sending message volume to ‘extremely high’ levels. 

At last check, Warner Bros. Discovery shares were up 15.16% at $12.46, marking the highest since Dec. 21, 2023. The stock is down about 5% for the year. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.<