Wall Street shrugs at Max as WBD shares fall 6%

Warner Bros. Discovery shares fell nearly 6% today as the company launched its newly branded streaming service amid a flurry of new show announcements.

The location was the location of Warner Bros. and it was only a press conference, not an investor day, despite Wall Street investing heavily in the streamscape. WBD shares ended the session up 5.83% at $14.06, outperforming other media stocks and the broader market. You are confused in aftermarket trading.

There were no big surprises today. The HBO Max change to Max was here. Some on the Street aren’t happy with the new name, one analyst noted — echoing the laments in the creative community about the downgrading of HBO’s iconic brand. The highlights of the program included a game of thrones predecessor and Harry Potter TV programs.

WBD shares have had one big rally so far (they started at around $9), but that was after they really took a hit in 2022.

Discovery and Warner Media merged a year ago. The combined company is heavily indebted and off to a rocky start. Sentiment has turned somewhat this year as costs have been cut, programming has been streamlined and the focus has shifted to deregulation. Now it combines HBO Max and Discovery+ with the combined offering, which launches on March 23.

“We will grow free cash flow and invest in great stories,” said CEO David Zaslav. “We want to share these stories with as wide an audience as possible.”

JB Perette, WBD’s head of global streaming and gaming, pledged to preserve and protect “one of the most recognizable brands on television.” Casey Bloys, HBO and Max’s chief content officer, said HBO is “not changing course at all.”

Media stocks were generally weak today. Comcast and Netflix were down 2%, Disney down 2.5% and Paramount Global down 3%. The DJIA closed up 0.11% and the Nasdaq up 0.85%.

Broader economic forces destroyed stocks. New data this morning showed that inflation remained high in March, albeit cooling. Minutes from the March Fed meeting showed staff fears of a recession later this year. The looming recession fears have made advertisers extremely cautious about spending and it is not clear whether or not the central bank will raise rates again at its next meeting in May.