Buying Warner Bros. Discovery Today Isn't a Bet on Media. It's a Bet on 12 State Attorneys General.
A signed $31 cash deal, two regulators' blessings, and one courtroom standing between shareholders and the payout.
Overview
Warner Bros. Discovery (NASDAQ: WBD) trades near $26 as of this writing. Paramount Skydance holds a signed agreement to pay $31.00 per share in cash for the company. That gap -- about $5 per share, or roughly 20% -- has nothing to do with box-office results, streaming subscribers, or cable's decline. It is a courtroom discount.
Anyone buying the stock today should be clear about what they're purchasing. It isn't really a media business right now. It's a claim on $31 in cash, discounted by the odds that 12 state attorneys general convince a judge to kill the deal that produces it.
Image source: Getty Images.
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Originally published at www.fool.com.