Warner Bros Discovery (WBD) Stock Soars as Company Breaks Itself in Two

TLDR

Table of Contents

Warner Bros Discovery shares jumped 9% after announcing plans to split into two separate companies
First company will focus on streaming and studios, including HBO, Warner Bros studios, and DC content
Second company will house global networks like CNN, TNT Sports, and Discovery channels
David Zaslav will lead the streaming division while CFO Gunnar Wiedenfels heads the networks business
The tax-free spin-off is expected to complete by mid-2026

Warner Bros Discovery stock surged Monday morning following the company’s announcement of a major restructuring plan. The media conglomerate revealed it will split into two independent businesses by mid-2026.

The decision sent WBD shares climbing approximately 9% in early trading. This jump helped the stock recover most of its year-to-date losses of about 7%.

The first entity will focus on streaming and entertainment content. This division will include Warner Bros Television, Warner Bros Motion Picture Group, and DC Studios. HBO and HBO Max will also be part of this streaming-focused company.

Warner Bros Discovery is splitting into 2 companies.
Streaming & Studios: WB Television, WB Pictures, WB Games, DC Studios, HBO, HBO Max + their film & TV libraries
Global Networks: CNN, TNT Sports, Discovery, Discovery+ & other TV networks pic.twitter.com/kj58IPu6Dl
— DiscussingFilm (@DiscussingFilm) June 9, 2025

Current CEO David Zaslav will continue leading this entertainment division. The company will retain the valuable film and television libraries that Warner Bros has built over decades.

The second business will center on global networks and traditional media properties. CNN, TNT Sports, and Discovery channels will form the core of this division. European free-to-air channels, Discovery+, and Bleacher Report will also be included.

Chief Financial Officer Gunnar Wiedenfels has been tapped to run the networks business. This marks a promotion for Wiedenfels, who joined the company during the 2022 merger of Warner Media and Discovery.

Market Response and Analyst Views

The split announcement wasn’t entirely unexpected by Wall Street watchers. Bank of America analyst Jessica Reif Ehrlich had previously suggested such a move could benefit WBD shareholders.

Ehrlich maintains a Buy rating on the stock with a $14 price target. This target represents roughly 43% upside potential from recent trading levels.

The premarket trading surge of 8.6% showed immediate investor approval. Many shareholders had been waiting for management to take action to unlock value from the merged entity.

Financial Structure and Timeline

The company plans to structure the separation as a tax-free spin-off for shareholders. This means existing WBD investors will receive shares in both new companies without immediate tax consequences.

Management expects the process to take nearly two years to complete. The mid-2026 timeline allows for regulatory approvals and operational separation work.

Each new company will be able to focus on its specific market and operational needs. The streaming business can prioritize content creation and digital platform growth.

The networks division can concentrate on traditional broadcasting and cable operations. This separation could lead to more targeted strategic decisions for each business.

The announcement comes as media companies face pressure to adapt to changing viewer habits. Streaming services continue gaining ground while traditional cable viewership declines.

Warner Bros Discovery formed through the 2022 merger of WarnerMedia and Discovery Inc. The combined company has struggled with debt levels and integration challenges since the deal closed.

The split represents the latest major move by Zaslav to reshape the media landscape. His tenure has included content cancellations, cost-cutting measures, and strategic pivots.

Shareholders will receive detailed information about the separation process as it develops. The company expects to provide more specifics about the financial structure and leadership teams in coming months.

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