2024-03-26 03:04:39 ET
Summary
- Warner Bros. Discovery stock is currently undervalued at $8.50/share, with a market cap of just $21B.
- The company's advertising and adjacent segments are in terminal decline due to the decline of linear television and the rise of digital streaming.
- WBD's strategy focuses on growing its Direct-to-Consumer streaming business, generating free cash flow, and paying down debt.
- The debt is now under control, and it has generated $5B+ per year in free cash flow.
One of the most tortured stocks of the past few years has been Warner Bros. Discovery, Inc. ( WBD ), and at $8.50/share, the stock is dirt cheap. The last time Discovery as a standalone equity was this cheap was during the financial crisis of 2008-2009. Warner Bros. Discovery was formed when AT&T (T) spun off WarnerMedia and merged it with Discovery in a Reverse Morris Trust. A Reverse Morris Trust ((RMT)) allows a company like AT&T to divest a company without having to pay gains on the transaction. Regardless of the means, the deal created one of the largest media companies on the planet with an extensive content library....
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Warner Bros. Discovery: You Will Wish You Bought More