What Happened?
Shares of global entertainment and media company Warner Bros. Discovery (NASDAQ: WBD) jumped 3.9% in the morning session after CEO David Zaslav indicated that the company plans to increase subscription prices for its HBO Max streaming service and address password sharing.
Speaking at the Goldman Sachs Communacopia and Technology conference, Zaslav stated he believes the streaming platform is "way underpriced" for its premium content and sees a "real opportunity" to raise prices over time. In addition to the pricing strategy, the company also unveiled a broader strategic repositioning. This included news that Warner Bros. Discovery has reduced its debt by $20 billion and expects its streaming business to achieve profitability exceeding $1.3 billion this year. The company's studio business is also on track to outperform its initial revenue guidance, signaling a multi-faceted approach to improving financial performance and shareholder value.
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What Is The Market Telling Us
Warner Bros. Discovery’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 4.1% on the news that markets pulled back with the decline concentrated in the tech space as investors engaged in profit-taking following a robust week that saw the S&P 500 hit a new record.
Adding to the pressure, new inflation data, specifically the Core PCE, showed an acceleration in July, signaling that rising prices remain a risk despite being in line with expectations. This confluence of factors, including market highs heading into a historically weak September, led to a pullback, with the Nasdaq Composite shedding 1.15%. While the Federal Reserve has hinted at potential rate cuts, the focus on inflation and the jobs market continues to influence investor sentiment.
Warner Bros. Discovery is up 24.5% since the beginning of the year, and at $13.28 per share, it is trading close to its 52-week high of $13.70 from July 2025. Investors who bought $1,000 worth of Warner Bros. Discovery’s shares 5 years ago would now be looking at an investment worth $581.47.
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