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WBD Stock Unmoved; Seeks to Sell Stake in GB News
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WBD Stock Unmoved; Seeks to Sell Stake in GB News

Story Highlights

Warner Bros is planning to sell its stake in loss-making television channel GB News. The company will focus on its other media brands.

Warner Bros (WBD) is in the process of selling its stake in the loss-making television channel GB News. Bloomberg reports that the sell-off should allow the embattled news outlet to pursue a new £60 million fundraising round. In addition, GB News co-founders Andrew Cole and Mark Schneider are also set to sell their stakes.

WBD stock fell 0.53% following reports of the GB News sale.

Warner Bros’ Plans after GB News Sale

According to the Guardian, the sale of the GB News stake comes as WBD seeks to rationalize its portfolio following the merger of Discovery and Warner Media. It was initially the first company to invest £20 million of the £60 million raised by GB news early in the year.

By exiting GB News, Warner Bros intends to focus on its other media brands, which include CNN Worldwide, TVN Group in Poland, and Newshub in New Zealand.

Hedge fund manager Paul Marshall and investment group Legatum are to buy the GB News stakes up for sale. GB News needs more funds just 18 months after it said it had £60 million that would last three years.

The remaining backers are expected to step forward and inject £60 million in cash into the business. The new funding, which will be completed in the next few weeks, is to finance expansion plans. In addition, the U.K. news channel plans to invest in a new digital product site, technology, and studio.

The fledgling news channel has been under pressure after being hit by a boycott of advertisers, who opposed its editorial stance. It also had to contend with stiff competition from Talk TV, an alternative conservative-leaning channel started by Rupert Murdoch.

What is the Prediction for WBD Stock?

While Warner Bros stock is down by 43% year-to-date, Wall Street remains optimistic about the stock’s long-term prospects. According to TipRanks’ analyst rating consensus, Warner Bros is a Moderate Buy based on seven Buys, seven Holds, and one Sell. The average Warner Bros price target is $25.62, which implies 94.24% upside potential to current levels.

Also, TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on Warner Bros’ stock. Over the past 30 days, 3.2% of the best-performing portfolios tracked by TipRanks increased their exposure in Warner Bros stock.

Final Thoughts

Warner Bros’ sale of its stake in the fledgling U.K news outlet GB News should ease some pressure, allowing the company to focus on other brands with tremendous potential.

Disclosure.

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