Warner Bros. Discovery (WBD) stock added 15% value on Thursday as the company announced a restructuring that will help to unlock future shareholder value.
The company’s Board of Directors announced a new corporate structure under which Warner Bros. Discovery will serve as the parent company for two distinct operating divisions.
The two divisions are...
The new corporate structure is designed to enhance clarity and focus for the overall company. The separate divisions will be positioned to deliver specific strategic and operational objectives while executing plans for the consolidated Warner Bros. Discovery.
For more than a year, the market has speculated that Warner Bros. Discovery would sell, merge or restructure their assets as the landscape for streaming entertainments has become more challenging.
Investors’ reaction to the plan is overwhelmingly positive with the stock trading higher on heavy volume. WBP stock has now erased its losses for 2024 after trading as much as 45% lower during the year.
The stock has also shifted above the $10 price, often a psychological hurdle for stocks.
Shares of Warner Bros. Discovery engaged in a monumental trend shift in mid-November following the company’s earnings report after trading in a tight range since April. The renewed rally in shares came as the company’s CEO assured investors that WBD was set to undergo fundamental changes.
On November 20, Warner Bros. Discovery shares formed a “Golden Cross” formation as the stock’s 50-day moving average crossed above its 200-day moving average. The pattern is often a reliable forecast that a stock has shifted into a positive momentum stage that results in higher prices 4-6 months later.
Shares of WBD also moved into a new long-term bull market trend in November as they crossed above their 20-month moving average.
The combination of positive fundamentals and technical shifts our long-term view on Warner Bros. Discovery to Bullish with a price target of $20.
