That sale is being blamed for the slow pace of renewals for some of The CW's shows, including the Warner Bros.-ownedDC's Legends of TomorrowandBatwoman, and CBS'sCharmedandDynasty. Apr 11, 2022 1:58 PM EDT. net asset value under U.S. federal income tax purposes $33 billion + $10 billion additional amount) transferred into the Spinco in transaction step #1: totaling $33 billion, which represents the estimated fair value of AT&T's equity interest in total WarnerMedia assets and liabilities to be transferred to Spinco as discussed in transaction step #2. All Right Reserved. NEW YORK and DALLAS, April 8, 2022 Today Discovery, Inc. and AT&T Inc. * ( NYSE:T) announced that they have closed their transaction to combine the Invest better with The Motley Fool. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. I am a also value / buy and hold investor. Telecom giant AT&T chose to spin off, rather than split off, WarnerMedia in a key step of the entertainment units merger with Discovery to avoid having to really discount the merged Warner Bros. Discoverys stock, AT&T CFO Pascal Desroches told investors Monday. AT&T Ex-Distribution Trading - AT&T shareholders can engage in "Ex-Distribution Trading" during the two-way trading period if they wish to only sell their right to AT&T RemainCo and retain their stock dividend pertaining to the WBD transaction. Many investors got shares of the newly created company without doing anything. I have no business relationship with any company whose stock is mentioned in this article. to create Warner Bros. Discovery currently has 700 million shares outstanding, while 1.7 billion new shares will come to market as part of the transaction. To management's credit, it has initiated corrective measures to offset these developments. David Nadelle is a freelance editor and writer based in Ottawa, Canada. However, both stocks will be attempting to catch up to well-heeled competition: AT&T in connectivity, and Discovery-plus-WarnerMedia in the streaming wars. Investors will learn more in the coming quarters about how things are working out. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Discovery+ added 2 million subs and HBO Max gained 3 million subscribers during the last quarter at the same time that Netflix had a net loss of 200,000 subscribers. Sign up for THR news straight to your inbox every day. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The executive also told the Deutsche Bank Media, Internet & Telecom Conference in Palm Beach, Florida, that AT&Ts stock should be appealing to investors after the WarnerMedia deal as the company is paying dividends, targeting earnings growth and is attractively priced. See which stock you should consider. For a time, it seemed like Warner was a big dog, buying up companies like DC Comics, Six Flags, and Lorimar. Price as of February 28, 2023, 4:00 p.m. One of the keys to HBO's growth is international markets, where it has lagged behind Netflix and others. The Coke vs. Pepsi debate doesn't just apply to the supermarket the brands are also rivals in the stock market. But it said that the ongoing reorganization, expected to be largely complete by the end of next year, could result in additional impairments above the revised estimates.. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Since I require a discount in the share valuations of my investments, my ratings are generally very conservative. However, those that looked to streaming companies to build a portfolio are in much worse shape. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). And right or wrong, management has made a decision to invest a lot of the incoming funds into a number of investment initiatives. Net income for the quarter hit $456 million, with EPS of $0.69 cents. Among the reports that came out of the first week of Warner Bros. Discovery to report a loss of 35 cents a share, on revenue of $11.2 billion. A recent survey by WhipMedia determined that 92% of respondents find library content, or pre-existing series and films, very important or important when choosing a streaming service. Discovery ended last week with their stock up 3%, following the successful acquisition of AT&T's WarnerMedia subsidiary by Discovery. I'll be launching in the near future with a legacy discount for early subscribers and I'll be sharing more details as we ramp up to launch in the coming months. Bret Kenwell. The combination of issued Spinco Debt Securities and cash proceeds from Spinco Financing Agreements provided to AT&T as part of transaction step #2 must total $43 billion, which represents the total consideration paid by Spinco to AT&T in exchange for its equity interests in the assets and liabilities of WarnerMedia (i.e. Market Realist is a registered trademark. Discovery (DISCA) stock is trading sharply higher on May 17 after it announced a definitive agreement to combine with AT&Ts media assets. Erik Khalitov/iStock Unreleased via Getty Images. But upon consummation of the deal, all Discovery shares will merge into the new company with one vote per share. He called out this months blowout debut of the game Hogwarts Legacy, and announced a new deal for multiple Lord of the Rings movies further out. While it was a nice niche player before, I think the growth possibilities for the new company are much bigger than they would have been for Discovery alone. Year-to-date, Warner Bros. Discovery, with Discovery shareholders holding the rest. In our last coverage on the upcoming WBD transaction and its implications for AT&T post-close, we had provided a detailed estimate on WBD's upside potential attributable to AT&T shareholders post-close. Now consider that the portfolio of Discovery+ will be added to that of HBOMax, and you have the makings of a content king. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. The transformation weve undergone over the past 18 months while delivering outstanding operational results has brought us to this point. During the earnings call, management noted HBO Max streaming service recently reported a gain of three million subscribers. Discovery stock was up 5% in midday trading on the stock market today, near 32.50. At least both companies won't be distracted with an adjacent industry anymore. The resultant company, Warner Bros. The thinly traded shares (ticker: DISCB) that are 95% owned by media mogul and Discovery board member John Malone traded Tuesday at $68.88, down $1.02. Is this happening to you frequently? Controlling interest of the studio was sold to Seven Arts Productions in 1966, but Jack Warner, still managing the studio, had a confrontational relationship with them and by 1969, Seven Arts sold Warner to Kinney National Company. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Apple, Fortinet, Intel, Qualcomm, Taiwan Semiconductor Manufacturing, and Warner Bros. The streaming media and telecom worlds were shaken Monday, when AT&T (T -0.63%) announced it would be spinning off its WarnerMedia division and combining it with Discovery (DISCA) (DISCK). Founded by four brothers in 1923, Warner Bros. is a giant in the film industry, but has changed hands more time than most fans can count. However, Warner Bros. ET, Why AT&T, Fortinet, and TSMC Are No-Brainer Buys Right Now, This Dividend Stock Is a Safe Bet Regardless of Market Conditions. WarnerMedias domestic linear TV revenue is projected to decline by 2% annually through 2025. Warner Bros. With the megamerger of Discovery and AT&Ts WarnerMedia closing late on Friday, creating new media and entertainment giant Warner Bros. However, a significant share of WBDs revenue is derived from the companys cable business, and it is no secret that cable is experiencing a secular decline. At the time of the WarnerMedia and Discovery merger in April, Zaslav promised to find $3 billion in savings from the deal, per NBC. While Zaslav has not run a more traditional media company like WarnerMedia, the longtime Discovery CEO presided over the transition of the company from a cable network owner to an unscripted content creation powerhouse, said Macker. Discover: 15 Cheap, Beautiful Places To RetireCash App Borrow: How To Borrow Money on Cash App. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. What's been going on and is now the time to sell out of the stock? distribution of Spinco common stock to eligible AT&T shareholders as of record date), which occurs prior to completion of the WBD merger. Stock Market Holidays 2023: Is the Stock Market Open Today? WBD quickly axed CNN+ shortly after the April merger (although some of CNNs programming can be found on Discovery) and just this week confirmed that two films slated for an HBO Max-only release the anticipated Batgirl and the animated Scoob! If so, how? Leading up to WBDs second quarter earnings report, a number of equities analysts issued ratings statements and reduced price objectives for the company, including Cowen ($24, May 12), Bank of America ($23, July 14) and Moffett Nathanson ($18, July 22). The company also pointed to a weak macroeconomic environment and challenging dynamics in the streaming industry. I am not receiving compensation for it (other than from Seeking Alpha). (I update this score on at least a quarterly basis for readers.). The merger deal will see AT&T spin off WarnerMedia, to be merged with Discovery. The gap period will be at least a week (but complete within April according to the intended closing period proposed by management), considering AT&T will be required to provide Discovery with a list of AT&T shareholders eligible for shares of WBD common stock as of record date at least five business days prior to the actual stock dividend distribution. In a race to create content, WBD is at a distinct disadvantage in terms of its balance sheet. The Motley Fool recommends Discovery (C shares). See: 9 Bills You Should Never Put on AutopayFind: 7 Things You Should Never Do When Planning For Retirement. Essentially, the estimated transaction value considers the closing price of $25.37 per share for Discovery Series A common stock as of March 9th as a proxy for the WBD IPO price (recall that one Discovery Series A common stock is exchangeable for one WBD common stock post-close as discussed in earlier sections). A loss of 35 cents a share, on revenue of $ 0.69.... 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