TLDR
- Stanley Druckenmiller completely sold his Tesla stake during Q2 2025, dumping 18,838 remaining shares after reducing position by 50% in Q1
- Druckenmiller purchased 6.5 million shares of Warner Bros. Discovery, which surged 56% last week on acquisition rumors
- Paramount Skydance is reportedly preparing a cash bid for Warner Bros. Discovery, according to Wall Street Journal reports
- Tesla faces declining demand with automotive revenue down 16% in Q2 and global vehicle inventory up 33%
- Warner Bros. Discovery traded below book value for years until recent merger speculation drove shares higher
Billionaire investor Stanley Druckenmiller made two major portfolio moves during the second quarter that proved well-timed. The Duquesne Family Office chief completely eliminated his Tesla position while loading up on Warner Bros. Discovery shares.
Druckenmiller sold his remaining 18,838 Tesla shares after already cutting the position by 50% in the first quarter. This move came as the electric vehicle maker faced mounting challenges across multiple fronts.
Tesla’s automotive revenue dropped 16% in the second quarter compared to the same period last year. The company’s global vehicle inventory increased by 33% to 24 days despite implementing more than six price cuts to boost demand.
The regulatory environment also shifted against Tesla. The Trump administration eliminated the automotive regulatory tax credit for electric vehicles through legislation. Tesla had relied heavily on these credits and net interest income to generate more than half of its pre-tax income.
Several product disappointments may have influenced Druckenmiller’s decision. Cybertruck sales failed to meet expectations while Tesla’s robotaxi launch in Austin proved limited and underwhelming.
CEO Elon Musk’s history of overpromising appears to have concerned investors. The company has promised Level 5 autonomy for eleven consecutive years while remaining stuck at Level 2 throughout that period.
Tesla’s valuation multiples also reached extreme levels. Shares traded at 234 times forecast 2025 earnings despite expected sales declining by 5%. Most automotive stocks trade closer to 10 times forecast earnings.
Warner Bros Discovery Acquisition Target
While exiting Tesla, Druckenmiller purchased 6,537,160 shares of Warner Bros. Discovery between April and June. This investment gained immediate value when acquisition rumors surfaced last week.
Warner Bros. Discovery shares jumped 56% following reports that Paramount Skydance was preparing a cash bid for the company. The Wall Street Journal first reported these acquisition discussions on September 12.
The timing coincided with Warner Bros. Discovery’s June announcement of plans to split into two separate companies. One entity would house Warner Bros. Television, movie studios, HBO and HBO Max. The other would contain sports, news television brands and the Discovery+ streaming service.
Regulatory Environment Supports Consolidation
The Federal Communications Commission’s September agenda includes potential elimination of the dual network rule. This regulatory change could open doors for further media industry consolidation among major players.
However, any merger would still require Department of Justice approval. Benchmark analysts previously estimated potential synergies of $3 billion from a Paramount-Warner Bros. combination in December 2023.
The investment bank suggested Paramount could pay around $18 per share for Warner Bros. Discovery while maintaining value neutrality. Current analyst price targets for Paramount Skydance range from $8 to $20.
Warner Bros. Discovery’s streaming segment has shown improved operating results recently. International subscriber count jumped 34% year-over-year to 67.9 million as of June 30. Revenue increased while selling, general and administrative costs declined.
The company traded below book value for years until the merger speculation emerged. This provided opportunistic investors like Druckenmiller a window to purchase shares at attractive valuations.
Paramount Skydance stock rose 7% on Friday following the acquisition rumors. The shares have delivered a 67.63% return year-to-date and trade near the 52-week high of $17.58.
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