Shares of Warner Bros. Discovery dipped nearly 6% today as the company took the wraps off its rebranded streaming service amid a flood of new programming announcements.
The venue was the Warner Bros. lot and this was a pure press conference, not an investor day, although Wall Street is heavily invested in the streaming landscape. WBD shares ended the session off 5.83% at $14.06, down more than other media stocks and the broader market. They’re up hair in after-market trade.
There weren’t any huge surprises today. The rebrand, from HBO Max to Max, has been out there. Some on the Street aren’t thrilled with the new name, noted one analyst, echoing laments in the creative community about kneecapping the iconic HBO brand. Programming highlights included a Game of Thrones prequel and Harry Potter TV series.
WBD shares have had a big run-up year to date (they started out around $9) but that was after having being really crushed in 2022.
Discovery and Warner Media merged a year ago. The combined company carries a massive debt load and got off to a rocky start with the Street. Sentiment started to turn slightly this year as it cuts costs, streamlined programming and focused on deleveraging. Now, it’s blending HBO Max and Discovery+ with the combined offering to launch May 23.
“We are going to drive free cash flow and we are going to invest in great stories,” CEO David Zaslav said. “We want to share those stories with the broadest audience possible.”
J.B. Perette, WBD’s head of global streaming & games, promised to preserve and protect “one of the most iconic brands in television. HBO and Max content chief Casey Bloys said HBO is “not changing course at all.”
Media stocks were generally weak today. Comcast and Netflix eased 2%, Disney dipped 2.5% and Paramount Global 3%. The DJIA ended off by 0.11% and the Nasdaq by 0.85%.
Broader economic forces have been buffeting stocks. New data this morning showed inflation for March remains high, although cooler. Minutes from the Fed’s March meeting showed staffers feared a recession later this year. Looming recession fears have made advertisers extremely cautious on spending, and it is not clear if the central bank will or won’t raise rates again at its next meeting in May.