Shares of Warner Bros. Discovery jumped over 7% during Tuesday’s trading session after a leading analyst with Bank of America said the media conglomerate could create more value for shareholders by exploring strategic options, including a potential sale.
“In our view, the current composition as a consolidated public company is not working,” analyst Jessica Reif Ehrlich wrote in a note to clients. “At current levels, we argue that exploring strategic alternatives such as asset sales, restructuring and/or mergers would create more shareholder value vs. the status quo.”
Since closing its merger in 2022, WBD has seen its stock price fall over 67%, driven by headwinds surrounding its linear business, last year’s Hollywood strikes and recent NBA media rights negotiations, which could see TNT Sports lose out to Amazon and NBC and potentially impact its next round of negotiations with distributors.