Warner Bros Discovery shares gain on first trading day

FILE PHOTO: The Warner Bros logo is seen during the annual MIPCOM television programme market in Cannes, France, October 14, 2019. REUTERS/Eric Gaillard/File Photo

(Reuters) - Shares of Warner Bros Discovery Inc rose on Monday, the first trading day of the media and streaming firm formed from the $43-billion merger of Discovery Inc and assets of AT&T Inc.

Warner Bros Discovery shares were up 0.8% at $24.62, while AT&T stock climbed 2% to $18.62 before the bell.

AT&T and Discovery set out to create a standalone media business in May last year and the deal closed on Friday, with the new business housing channels including HBO, CNN and the Discovery Channel as well as franchises like "Batman" and "Harry Potter".

The company, which also owns streaming services HBO Max and Discovery+, faces stiff competition from the likes of Netflix and Walt Disney Co's Disney+.

Warner Bros Discovery is led by long-time Discovery veteran David Zaslav, and the new leadership team, announced last week, comprises many of his lieutenants.

"We expect that Zaslav will use his experience to help Warner Bros. Discovery transition into a DTC (direct-to-consumer) powerhouse by focusing further investment in both content and the user experience, which has garnered complaints on both HBO Max and Discovery+," Morningstar analyst Neil Macker wrote in a note.

Analysts at MoffettNathanson also signaled rising interest rates as a concern for the stock, adding there are concerns about slowing DTC subscriber growth across the industry.

Meanwhile, AT&T can focus on its core business as the telecom major uses part of the proceeds to cut down debt.

J.P. Morgan said it was an attractive time to buy into AT&T.

"We see the stock as defensive and inexpensive with a high dividend yield of 6.0% and FCF (free cash flow) yield of 14.2% as long as the company can continue to deliver on its guidance and financial targets," the brokerage said.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Devika Syamnath and Sriraj Kalluvila)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights


Next In Tech News

Sony accelerates PC gaming push with Inzone gear
These gadgets could make or break your next road trip
Uber, Lyft drivers switch to Teslas as high gas prices squeeze profit
Kyle Rittenhouse keeping himself in the public eye, launching anti-'Fake News' game
'You can always come up with new ways to scare people': The 'visceral' horror of 'Callisto Protocol'
Uber ex-security chief accused of hacking coverup must face fraud charges, judge rules
Pinterest CEO steps down, Google executive to take over in e-commerce push
Amazon places purchase limit on emergency contraceptive pills
Russian parliament approves tax break for issuers of digital assets
G7 to tackle cyber threats and disinformation from Russia: communique

Others Also Read