NBA Loss Sinks Warner Bros. Discovery Stock – Bad For Max, Could Hasten Linear Decline, Wall Street Fears

deadline.com:

Shares of Warner Bros. Discovery fell about 8% at market open after the NBA‘s announcement yesterday of three big rights deals with three WBD rivals, shutting it out of professional basketball.

It’s the latest hit to an already depressed stock (changing hands now at below $8) that’s already so low that some on Wall Street are calling for CEO David Zaslav to split the company or merge again — just two years after the vaunted Warner Media-Discovery deal.

The company is said to be exploring options. Tim Nollen of Macquarie Equity Research downgraded the stock this morning to “neutral” from “outperform”, meaning he doesn’t think it’s going anywhere soon.

The shares are cheap already, he acknowledged, “but we don’t see a good fundamental investment case now.” “We have held onto our WBD rating in hopes that it would retain the NBA; losing these key rights means it now loses a core content asset for both its linear networks and its Max streaming service.