What Happened?
Shares of global entertainment and media company Warner Bros. Discovery (NASDAQ:WBD) jumped 11.1% in the afternoon session after the company reported decent fourth-quarter results that beat analysts' EBITDA estimates, driven by stronger performance in the Direct-to-Consumer (DTC) and Studios segments. The company also added more Max subscribers than expected. However, both revenue and earnings fell short. While the results were mixed, the quarter still showcased notable strengths.
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What The Market Is Telling Us
Warner Bros. Discovery’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Warner Bros. Discovery and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 14.3% on the news that the company revealed plans to split its business into two separate units: Global Linear Networks and Streaming & Studios. This change aims to simplify the organization's structure and provide more clarity in each unit. Global Linear Networks will focus on generating profits and increasing free cash flow while Streaming & Studios will prioritize growth and returns on invested capital.
Warner Bros. Discovery is up 7.7% since the beginning of the year, and at $11.49 per share, it is trading close to its 52-week high of $12.49 from December 2024. Investors who bought $1,000 worth of Warner Bros. Discovery’s shares 5 years ago would now be looking at an investment worth $465.55.
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