With many in the entertainment space focusing on Paramount (NASDAQ:PARA) and its various potential deals, some have started to wonder if Warner Bros Discovery (NASDAQ:WBD) will face a similar fate. Especially since it was briefly advanced as having an interest in buying Paramount itself. New reports suggest there’s a reason to wonder, and Warner gained nearly 2% in the closing minutes of Tuesday’s trading session.
It’s been two years since Discovery Networks and WarnerMedia combined, and the duo put themselves in an odd situation when they merged. While the deal that brought them together—using an arcane principle known as a Reverse Morris Trust—involved minimal tax liabilities, it also eliminated their ability to sell any part of themselves without incurring a hefty penalty for two years.
Those two years are now up, and that opens up the possibility of broader sales. But what, if anything, will Warner actually sell off? Components of its operations? Or its entire operation itself?
The Answer to that Otherwise Rhetorical Question
Actually, there is one thing that Warner has already sold. It sold the Roost Podcast Network—part of Rooster Teeth, which Warner formerly owned but shuttered just recently—to Night, a management company that represents, among others, popular YouTuber MrBeast.
Reports note that Night will keep most of the team involved in the network intact. With its AEW programming apparently reaching four million viewers weekly, there are some clear bright spots in this company. The question is, now that the lockup period is done, which will actually stick around under the Warner banner, and which will fade away?
Is Warner Bros Discovery Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on nine Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 43.67% loss in its share price over the past year, the average WBD price target of $13.61 per share implies 56.89% upside potential.
