Shares of Warner Bros Discovery Inc rose on Monday, the first trading day of the media and streaming firm formed from the $43 billion merger of Discovery Inc and assets of AT&T Inc.
Warner Bros Discovery shares were up 2.3% at $24.99, while AT&T stock climbed 2.1% to $18.65 in premarket trade.
AT&T and Discovery set out to create a standalone media business in May last year and the deal was closed on Friday, with the new business housing channels including HBO, CNN and the Discovery Channel as well as franchises like “Batman” and “Harry Potter”.
The company, which also owns streaming services HBO Max and Discovery+, now faces stiff competition from the likes of Netflix and Walt Disney Co’s Disney+ at a time of cooling user growth.
“The answer to our own long-standing question whether streaming is a good business becomes much more complicated if there are doubts around the size of the ultimate TAM (Total Addressable Market) and the level of sustainable steady-state profits,” said analysts at MoffettNathanson.
