Shashank Dhokade’s Post

Warner Bros. Discovery (WBD) is an interesting candidate for potential acquisition or strategic investment due to its unique position as one of the three streaming survivors (Netflix and The Walt Disney Company being the other two) and its significant undervaluation compared to historical highs. With Paramount Global Shari Redstone, who controls Paramount through her family's holding company National Amusements (NAI), ended merger talks with Skydance Media could attention turn to WBD with further price weakness? 📉 ▪️From January 2024 high ($11.66 to $7.24): The decline here represents a decrease of approximately 38%. ▪️From 52 Week high ($14.76 to $7.24): This represents a decrease of approximately 51%. Here’s a comparative analysis of WBD’s book value, DCF valuation, and breakup value against its current market price of $7.24/share: ▪️Book Value: $16.73 (discount 57%) ▪️DCF Value: $10.49 (discount 30%) ▪️Breakup Value: $9.31 (discount 22%) Note that “Breakup Value” is tough to get right without insider info so breakup could be higher or lower. I used market multiples and info I could find in financials. Treat as a back of the napkin, please. The DCF analysis uses a weighted average cost of capital or discount rate between 6.5% and 7.9%, and a long-term growth rate set at 4%. Strategic Considerations ▪️Market Position: WBD remains one of the three core survivors in the streaming service market, alongside Netflix and Disney. Its current undervaluation compared to these competitors, who have not seen similar declines, makes it an attractive target for investors looking for value and growth potential. The is zero future performance premium built into the stock price, what would John Snow do? 🐲 ▪️Pricing Power: WBD raised prices of ad-free Max subscriptions reflecting its content strength. If this was a company in decline the opposite might be true. Here is the story: https://lnkd.in/gNQx4FGB ▪️Institutional Ownership and Potential for Block Sales: WBD has a substantial institutional ownership of over 50%, which means a significant portion of its shares are held by large financial organizations, mutual funds, and pension funds. These institutions can execute large block sales off-market, providing a streamlined pathway for an interested investor group to acquire a substantial stake without disrupting market prices significantly. ▪️Very Limited Insider Buying: In mid-May 2024, WBD President of International, Gerhard Zeiler, increased his holding to 908,130 shares with a purchase of 100,000 shares at $8.3. Over the past 12 months, insiders have added 5.5M shares. https://lnkd.in/gug9jU2Q 📣 The combination of WBD’s strong market presence, significant discounts on various valuation metrics, and the structural potential for large block transactions makes it an appealing candidate for a take-private deal or a strategic merger. I bought shares of WBD on the close—not investment advise.

Pressure Mounts on Warner Bros. Discovery CEO David Zaslav to Deliver Value for Shareholders David Zaslav, CEO of Warner Bros. Discovery, is under increasing pressure to prove his strategy can deliver results for shareholders. With the company’s stock down nearly 70% since the 2022 merger with WarnerMedia, and a recent $9.1 billion impairment charge due to declining value in its linear TV networks, Zaslav's leadership is being closely scrutinized. Key Points: – Impairment Charge: A $9.1 billion non-cash charge has added to the company's challenges, linked to the decline of traditional TV networks. – Shareholder Concerns: The stock dropped around 9% in trading after the impairment announcement, with investors worried about the company’s future value. – Leadership Scrutiny: Zaslav's compensation has been high, rising 26.5% in 2023, but his strategies, including cost-cutting and layoffs, have yet to convince investors of long-term success. – Activist Investor Target?: The company's struggles may make it a target for activist investors, but significant hurdles exist, including the influence of key board members like John Malone. Company Strategy: – Streaming Focus: Despite the challenges in linear TV, Warner Bros. Discovery is seeing growth in its streaming platform, Max, which added 3.6 million subscribers in the last quarter. – Debt Reduction: Zaslav has focused on reducing debt, which now stands at $37.8 billion. – Market Dynamics: The potential loss of NBA rights and ongoing industry shifts put additional pressure on Zaslav to adapt and deliver. Investor Outlook: – Uncertain Future: With competition from giants like Disney and mergers like Paramount Global with Skydance Media, Warner Bros. Discovery's path forward is complex. – Need for a Win: Zaslav needs a significant win to reassure shareholders and solidify his position as the leader who can navigate these turbulent times. 🔗 Read more here: https://lnkd.in/g-Khq2tF #WarnerBrosDiscovery #DavidZaslav #ShareholderValue #MediaIndustry #Streaming #CorporateLeadership

Another Media Mega Merger Goes Sour as Warner and Discovery Plot Breakup - "Warner Bros Basically Admits its Merger with Discovery Did Not Work!" Too many streaming services has been a long-standing problem in the media industry, and not long ago the preferred solution of Wall Street was consolidation. Big media mergers would create powerhouse players with must-have content, the theory went. AT&T made waves with its purchase of Time Warner, only to later sell that business to Discovery. Now the company is reportedly considering unwinding the merger, spinning off the declining cable networks from the Max streaming service, HBO premium network, and Warner Bros. movie studio. This plan is complicated by the fact that the company’s cable channels, while certainly in decline, still generate a lot of cashflow that funds other operations. Simply making the company’s declining assets disappear into a new company may be a bit too good to be true. #freecast #nextgenstreaming #streamingwars #nomoreappdiving https://lnkd.in/eUj3u-eq

🚨 Big news in the streaming world! Disney and Fubo have announced a merger of Hulu + Live TV and Fubo, creating the second-largest live TV streaming provider with 6.2 million subscribers. As a business strategist, I see lessons here for founders navigating growth, cash flow, and team dynamics. Let’s break it down: 1️⃣ Strategic Partnerships Disney and Fubo are teaming up to combine their strengths—Disney’s entertainment empire meets Fubo’s sports niche. Founders: Are you exploring partnerships that could diversify your offerings or scale your business? 2️⃣ Cash Flow Moves Fubo secured $220M in cash and a $145M loan to stabilize operations. Cash flow is the lifeblood of any business! Are you ensuring liquidity to fund growth or weather challenges? 3️⃣ Turning Conflict into Opportunity This merger resolved Fubo’s antitrust lawsuit against Disney’s Venu Sports. Sometimes, resolving disputes can unlock unexpected growth opportunities. Are you holding onto conflicts that drain resources? 4️⃣ Leadership Continuity Fubo’s CEO will lead the new entity, ensuring stability during the transition. Founders: Is your leadership team prepared to handle scaling or big changes? 5️⃣ Consumer-Centric Innovation The merger promises more choices and flexibility for subscribers. Are you innovating based on what your customers truly need—or just what you think they want? 💡 Here’s the spicy part: Consolidation like this might mean higher costs for consumers, but it also drives innovation and competition. Founders in crowded markets—how are you differentiating yourself without pricing out your customers? P.S. What did I miss? Drop your thoughts in the comments! 👇 #BusinessStrategy #FounderTips #CashFlowMatters #ScalingYourBusiness #TeamEfficiency #FoundersQualityOfLife _______________________________ ♻️ Repost for other founders wanting to run their business smoothly so it can thrive! ➡️ Follow Kerry-Ann Powell, Esq. for more on scaling, increasing revenue, team efficiency, and founder burnout and quality of life. ⬇️ Download our guide for founders titled “The 8 True Culprits that Are Causing Chaos in Your Business” at www.nobusinesschaos.com

🎬 Warner Bros. Discovery Restructures for the Future: A Bold Move in Media Strategy 📈 Warner Bros. Discovery (WBD) is taking a game-changing step to adapt to the fast-evolving media landscape. The company just announced a major restructuring that will split its operations into two specialized divisions by mid-2025: 1️⃣ Global Linear Networks: Focused on maximizing cash flow from cable TV staples like CNN, TNT, and HGTV. 2️⃣ Streaming & Studios: Concentrating on growth in streaming (Max, Discovery+) and leveraging Warner Bros.’ legendary film and TV studios. Following the announcement, WBD’s stock jumped nearly 14%, signaling strong investor confidence. 💹 Why This Matters for Media and Finance 📊 Strategic Focus: By separating linear and streaming, WBD is creating flexibility to cater to two very different market dynamics. Each division can now pursue growth, profitability, and innovation independently. 💡 Value Creation: This move positions WBD for potential M&A opportunities while aligning with trends of consolidation in the media industry. It’s a smart play to unlock shareholder value while staying competitive. 🌍 Adapting to Change: The traditional TV model faces declining viewership, but streaming is the growth engine of the future. This split allows WBD to balance today’s challenges with tomorrow’s opportunities. The Bigger Picture for Investors This restructuring is not just a media story—it’s a finance story. It highlights the power of corporate realignment in driving operational efficiency, improving capital allocation, and positioning companies for long-term success. As investment bankers and finance professionals, it’s a reminder of the value we bring in helping clients navigate these transformative decisions. What’s your take on Warner Bros. Discovery’s move? Are we seeing the future of media strategy unfold? Let’s discuss! 👇 #WarnerBrosDiscovery #MediaStrategy #CorporateRestructuring #InvestmentBanking #Finance #MergersAndAcquisitions #Streaming #ValueCreation #CapitalMarkets #ShareholderValue #StrategicGrowth

Warner Bros. Discovery announced it will split its cable nets (CNN, TNT, Food Network) and its streaming and studio assets (Max, HBO, Warner Bros.) into two distinct business units by 2025. The goal is to unlock shareholder value and adapt to a rapidly changing media landscape. But what's concerning is that Max’s success is tightly linked to the content pipeline from WBD’s cable networks, and the company’s global distribution strategy often leverages those channels to negotiate better deals for streaming. Separating these assets could undermine that synergy. Meanwhile, the loss of NBA rights has already weakened TNT’s value, raising questions about the future profitability of WBD’s cable networks. With streaming growth slowing and linear TV declining...If it looks like WBD setting the stage for potential mergers or spinoffs... and smells like WBD setting the stage for potential mergers or spinoffs... ...it's probably WBD setting the stage for potential mergers or spinoffs. #WarnerBrosDiscovery #StreamingWars #MediaStrategy CC: The Streaming Wars

📈 The media landscape is poised for significant mergers and acquisitions (M&A) activity in 2025, driven by the contrasting trends of rising streaming services and declining traditional TV viewership. Major corporate deals, such as Skydance Media's acquisition of Paramount Global and Comcast's spinoff of its cable networks, highlight industry players' efforts to adapt to a streaming-centric world. Warner Bros. Discovery is also preparing for M&A, reorganizing into two divisions to enhance its competitive positioning. 💼 With a more favorable regulatory environment anticipated under the incoming Trump administration, industry sentiment is optimistic for M&A growth. Warner Bros. Discovery's CEO David Zaslav has indicated that the restructuring will create opportunities for transactions that could enhance shareholder value. This shift reflects a broader industry trend where companies are moving from defensive strategies to more aggressive positions to capitalize on emerging opportunities. 💰 A significant factor fueling potential media deals is the record amount of uninvested capital, estimated at $2.62 trillion, available for investment. This "dry powder" could lead to increased deal-making as companies seek strategic acquisitions to bolster their market presence. Additionally, joint ventures between streaming services are being considered as a way to address consumer subscription fatigue and maximize content investments. 🔄 As the industry evolves, the rationalization of the streaming sector is becoming increasingly apparent. Companies like WBD and Comcast are exploring partnerships to create comprehensive streaming bundles that could reduce churn and enhance user engagement. The urgency for results in this rapidly changing environment underscores the need for innovative strategies that can effectively navigate the complexities of today's media landscape. #TV #streaming #media

Interesting conversation:

Warner Discovery, the media conglomerate formed from the merger of WarnerMedia and Discovery Inc., has been navigating a turbulent landscape marked by financial pressures and strategic realignments. While the company grapples with lean times across many of its divisions, the movie studio segment seems to be an exception, experiencing notable success and profitability. #ggf #ggfdialogue #ggfnews #ggfsociialmedia #ggfupdate #Ravindrakirti

How adaptability is crucial for survival in a rapidly changing market! Blockbuster was once a dominant force in the video rental industry, founded in 1985 by David Cook. At its peak in the early 2000s, Blockbuster had over 9,000 stores worldwide and was a household name. However, the company failed to adapt to changing market conditions and technological advancements. Here are key points in Blockbuster's story: 1. Initial Success : Blockbuster revolutionized the video rental market with a wide selection of titles and convenient store locations. The company quickly expanded, becoming the leading video rental chain in the United States. 2. Acquisition and Expansion : In 1994, media giant Viacom purchased Blockbuster for $8.4 billion, further fueling its growth. Blockbuster diversified its offerings, including video games and DVDs as they became popular. 3. The Rise of Netflix : In the late 1990s and early 2000s, Netflix emerged with a new business model focused on DVD rentals by mail and later, streaming services. Blockbuster initially dismissed Netflix's potential, even rejecting an opportunity to buy Netflix for $50 million in 2000. 4. Technological Shift : As streaming services gained popularity and DVD sales declined, Blockbuster struggled to compete. The company was slow to embrace digital distribution, clinging to its traditional brick-and-mortar model. 5. Leadership Changes and Debt : Frequent changes in leadership and accumulating debt from expansion and acquisitions weakened Blockbuster. The company couldn't keep up with more agile and innovative competitors. 6. Decline and Bankruptcy : By the late 2000s, Blockbuster faced severe financial difficulties. In 2010, the company filed for bankruptcy, and most of its stores were closed or sold. 7. Last Standing Store : Today, a single Blockbuster store remains open in Bend, Oregon, serving as a nostalgic reminder of the once-great brand. #EmbraceInnovation #StayAheadOfTrends #BusinessEvolution #TechAdaptation #MarketDisruption #DigitalTransformation #ChangeManagement #LeadershipMatters #CautionaryTale