It was just a few hours ago when we heard that entertainment giant Warner Bros. Discovery (WBD) passed on the first offer out of Paramount Skydance (PSKY). And while we heard about the what, the why has only recently become clear. Turns out that Warner head David Zaslav is holding out for more money, and not without reason. Shareholders were over the moon, and Warner shares shot up nearly 4% in the closing minutes of Monday’s trading.
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Basically, the word out of Zaslav was: “Get serious or go home.” Early reports said that Paramount Skydance put up a bid of $20 per share, which represents a little over a $2-per-share premium over current prices. That, not surprisingly, was not only rejected, but was nearly eaten up by the jump in share prices over the course of the day.
The reports further noted that Zaslav might be willing to bite if the asking price goes to closer to $30 per share. A more official offer is likely to follow in the days ahead, and this first one was likely little more than a trial balloon that even the Ellisons knew would be rejected at first blush. With Warner planning to split its studio and streaming business from its TV arm, and both of these separate businesses set to prove valuable in their own way, Zaslav likely knows an unsplit business must be priced high enough to outweigh the value of splitting into two parts.
Horror By Candlelight
Meanwhile, with spooky season in full swing, Warner is getting together with Fever to put on a special event. Known as Candlelight: Warner Bros. Horror Classics, it is a concert series that features musicians playing by the light of several thousand candles, and featuring key elements of the soundtracks of some of horror’s greatest classics of the last 50 years.
While “classics” here might be subjective in some parts, others will likely be undeniable. Look for elements from Doctor Sleep and Final Destination: Bloodlines to play alongside pieces from Friday the 13th and A Nightmare on Elm Street. Finding a Candlelight show will take some doing, as they only appear in certain theaters in certain cities, and with limited ticket availability.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on five Buys and 11 Holds assigned in the past three months, as indicated by the graphic below. After a 126.79% rally in its share price over the past year, the average WBD price target of $17.82 per share implies 0.2% upside potential.
