Track market-moving stories before they get noisy

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Third Point’s Dan Loeb opened a brand new stake of 20,000,000 shares of Warner Bros. Discovery (NASDAQ:WBD | WBD Price Prediction), valued at $533,200,000, according to the fund’s Q2 2026 13F disclosure. It was the single largest new position Loeb established in the quarter, built from zero. Two other prominent managers joined him. In the same three-month window, David Einhorn’s Greenlight Capital and George Soros’s Soros Fund Management were also buyers of Warner Bros. Discovery. Positions are dated as of June 30, 2026 and were filed August 13-14, 2026.

That’s an unusual alignment. Activist, value, and macro schools rarely converge on the same media stock in the same quarter. Warner Bros Discovery is far from a widely held Magnificent 7 stock. Let’s see why some of the biggest names in investing are all piling in.

What Each Manager Did Dan Loeb / Third Point. New position: 20,000,000 shares valued at $533,200,000. Built from zero and Loeb’s largest new bet of the quarter.

David Einhorn / Greenlight Capital. New position: 2,246,180 shares valued at $59,883,158. Also built from zero.

George Soros / Soros Fund Management. Added 396,080 shares to reach 1,488,690 shares, valued $39,688,475.

13F filings disclose long US-listed equity positions only and never state rationale. They’re a snapshot of what funds held on June 30th, so positions could have moved since then.

What’s Actually Happening at WBD WBD sits at the center of the biggest corporate reshuffling in media. The board initiated a review of strategic alternatives and later agreed to a sale to Paramount Skydance. Management said on the Q2 call, “We remain confident that our agreed upon sale to Paramount Skydance will be completed.” The closing is on hold until the earlier of five days after legal proceedings complete or June 1, 2027. A December 2025 Netflix(Nasdaq: NFLX) bid was terminated, with a $2.80 billion Netflix termination fee paid in Q1 2026.

The operating picture is mixed but improving where it counts. Q2 2026 streaming revenue crossed $3 billion for the first time, with Adjusted EBITDA of $512 million and a margin near 17%. GAAP EPS came in at $0.06 versus a consensus of -$0.10. Revenue of $8.72 billion missed by 5.39%, dragged by a 39% ex-FX drop in Studios and NBA-rights loss. Net leverage sits at 3.4x with $29.7 billion net debt. Market cap is roughly $70.17 billion.

The forward slate is loaded: Harry Potter series premiering on HBO Max Christmas Day 2026, plus 2027 tentpoles including a new Batman, Man of Tomorrow, and Lord of the Rings: The Hunt for Gollum. Management is targeting 150 million streaming subscribers by year-end 2026 and a long-term 20%+ streaming Adjusted EBITDA margin.

The Bull Case and the Risks The setup offers multiple structural paths: deal close at a premium, standalone separation, or continued streaming inflection. Shares are up 137.61% over the past year, though still down 2.88% year-to-date at $27.99. The analyst target sits at $29.82.

Then there are the risks. Merger completion is uncertain into mid-2027, domestic linear pay TV subs are declining 10%, and separation costs run roughly $350 million quarterly. Gross debt is $33.1 billion.

The Take Three elite managers buying the same media name in one quarter is a signal worth studying, not a trade to copy blindly. Remember what a 13F is: a 45-day-old snapshot of long US equity positions. Prices have moved since June 30, and none of these managers has explained why they bought. The filings show conviction. The thesis is up to the investor to build.

Contact [email protected] for any questions or corrections.

Warner Bros. Discovery, Inc. (WBD) Q2 2026 Earnings Call August 6, 2026 8:00 AM EDT

Company Participants

Peter Lee - Senior Vice President of Investor Relations
David Zaslav - President, CEO & Director
Jean-Briac Perrette - President and CEO of Global Streaming & Games
Gunnar Wiedenfels - Senior EVP & CFO

Conference Call Participants

Steven Cahall - Wells Fargo Securities, LLC, Research Division
Richard Greenfield - LightShed Partners, LLC
Sean Diffley - Morgan Stanley, Research Division
Jessica Reif Cohen - BofA Securities, Research Division

Presentation

Operator

Ladies and gentlemen, welcome to the Warner Bros. Discovery Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Additionally, please be advised that today's conference call is being recorded. I would like to hand the conference over to Mr. Peter Lee, Senior Vice President, Investor Relations. You may begin.

Peter Lee
Senior Vice President of Investor Relations

Good morning, and thank you for joining us for our Q2 2026 earnings call. Joining me today from Warner Bros. Discovery's management is David Zaslav, President and Chief Executive Officer; Gunnar Wiedenfels, our Chief Financial Officer; and JB Perrette, CEO and President, Global Streaming and Games. This morning, we issued our earnings release, shareholder letter and trending schedule, and these materials can be found on our website at ir.wbd.com.

Today's presentation will include forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements about the benefits of the proposed transaction between Warner Bros. Discovery and Paramount Skydance, future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts.

Such statements are based upon the current beliefs and expectations of WBD's management and are subject to significant risks and uncertainties outside of our control that could cause

Key Takeaways WBD is expected to post Q2 revenues of $9.29 billion and a loss of 13 cents per share.NBA rights losses may cut streaming ad revenues 16% and linear-network ad revenues 20% ex-FX.HBO Max's premium slate may boost engagement, retention and subscriber-related revenues. Warner Bros. Discovery (WBD - Free Report) is slated to report second-quarter 2026 earnings on Aug. 6.

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $9.29 billion, suggesting a 5.3% year-over-year decline.

The consensus mark for the second-quarter bottom line is currently pegged at a loss of 13 cents per share, widened by a penny over the past 30 days. This also marks a sharp decline from the year-ago quarter's earnings of 63 cents per share.

In the last reported quarter, Warner Bros. Discovery delivered a negative earnings surprise of 1,070%. The company’s earnings beat the Zacks Consensus Estimate once in the trailing four quarters and missed the same in the remaining three, with an average negative surprise of 306.56%.

Let’s see how things have shaped up for WBD before the announcement.

What Investors Should Watch Ahead of WBD's Q2 ResultsWarner Bros. Discovery is expected to face a meaningful advertising headwind in the second quarter of 2026 due to the absence of NBA broadcasting rights. Management indicated that the loss of NBA programming will create a 16% ex-FX headwind to Streaming advertising revenues and a 20% ex-FX negative impact to Global Linear Networks advertising revenues in the quarter under review. While certain sports events will provide partial offsets, the NBA has historically been one of WBD's largest advertising drivers, making its absence likely to have pressured year-over-year advertising growth and overall revenue performance.

The company's Global Linear Networks business continues to face structural pressure from declining pay-TV subscriptions. In the first quarter, domestic linear pay-TV subscribers fell roughly 10%, contributing to weaker distribution revenues. Warner Bros. Discovery indicated that underlying domestic delivery trends in the second quarter would remain broadly similar to the prior quarter, suggesting these secular declines are likely to continue weighing on affiliate-fee growth, advertising revenues and network profitability during the quarter under review.

The company continues to incur restructuring, separation and transaction-related expenses as it progresses toward its planned merger with Paramount Skydance. WBD anticipates additional cash expenses related to the transaction even before the deal is finalized; this means that, despite improvements in core business operations, these expenses are likely to continue weighing on the company's reported earnings and free cash flow in the quarter to be reported.

Offsetting these headwinds, WBD entered the second quarter with a compelling HBO Max content lineup, including the successful return of Euphoria, continued momentum from The Pitt and the June release of House of the Dragon Season 3. The company also highlighted an attractive pipeline featuring Stuart Fails to Save the Universe, Lanterns and Harry Potter and the Philosopher's Stone extending into the second half of the year. This steady flow of premium content is designed to boost viewer engagement, improve retention and attract new subscribers, supporting higher subscriber-related revenues. As a result, the streaming business is expected to have benefited from stronger user activity and monetization in the quarter under review.

What Our Model Says About WBD StockOur proven model does not conclusively predict an earnings beat for WBD this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you can see below.

WBD currently has an Earnings ESP of -85.14% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to ConsiderHere are some companies worth considering, as our model shows that they have the right combination of elements to beat on earnings in their upcoming releases:

Versant Media Group, Inc. (VSNT - Free Report) currently has an Earnings ESP of +6.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

VSNT shares have gained 23.7% in the past six months. VSNT is set to report second-quarter 2026 results on Aug. 6.

Corsair Gaming (CRSR - Free Report) currently has an Earnings ESP of +9.09% and a Zacks Rank #2.

CRSR shares have surged 127.8% in the past six months. CRSR is slated to report second-quarter 2026 results on Aug. 6.

Six Flags Entertainment Corporation (FUN - Free Report) currently has an Earnings ESP of +6.90% and a Zacks Rank #3.

FUN shares have returned 1.6% in the past six months. FUN is set to report its second-quarter 2026 results on Aug. 6.

Earlier this year, the streaming and entertainment industry witnessed one of its most high-stakes megadeals ever, stunning industry observers. Not only is it historic in its size, but it is also predicted to disrupt Hollywood and the media business as we know it. 

After years of Warner Bros. Discovery (WBD) struggling under the weight of billions of dollars in debt, compounded by declining cable viewership and fierce competition from streaming platforms, the company has been considering major strategic changes, including selling its entertainment assets to one of its rivals.

Several major players saw the potential in acquiring the media giant, and in December, Netflix announced it would acquire WBD’s studios and streaming for $82.7 billion.

But in a surprise eleventh-hour move in late February, the David Ellison-run Paramount became the winner of this bidding war, offering $111 billion to acquire all of WBD’s assets, including its studios, HBO, streaming platforms, games, and TV networks such as CNN and HGTV. Paramount was recently acquired by Ellison with significant support from his father, Larry Ellison — the Oracle chairman, world’s sixth-richest person, and major Trump donor.

Paramount’s offer was approved by the U.S. Department of Justice (DOJ) in June. However, a federal judge just paused the deal after a lawsuit was filed on July 13 by a coalition of 12 state attorneys general.

Let’s break down exactly what is happening, what’s at stake, and what could come next. 

What has happened so far? ​This all started back in October when Warner Bros. Discovery revealed it was exploring a potential sale after receiving unsolicited interest from several major players in the industry.

​The bidding process quickly became competitive, and Paramount and Comcast emerged as serious contenders, with Paramount initially viewed as the frontrunner. 

However, WBD’s board eventually determined that an offer from the streaming giant Netflix was the most attractive. Netflix offered $82.7 billion for just Warner’s film, television, and streaming assets.

Thus began the bidding war. Paramount believed its bid of approximately $108 billion for all of Warner’s assets was superior to Netflix’s offer that focused on just the studios and streaming. To sweeten its deal, Netflix amended its agreement in January to an all-cash offer at $27.75 per share of Warner Bros. Discovery, further reassuring investors and paving the way for the deal to proceed.

​Paramount persisted in its attempts to acquire WBD. Still, the Warner board repeatedly rejected its offers, citing concerns about Paramount’s heavy debt load and the increased risk associated with its proposal, including concern over the suite of investors bankrolling Paramount’s bid, which includes Saudi, Qatari, and Abu Dhabi sovereign wealth funds. The board noted that Paramount’s offer would have left the combined company burdened with $87 billion in debt, a risk they were unwilling to take at the time.

In January, Paramount filed a lawsuit seeking more information about the Netflix deal. A month later, the company sought to sweeten its deal by announcing it would offer a $0.25 per share “ticking fee” to WBD shareholders for each quarter the deal fails to close by December 31, 2026. It also said it would pay the $2.8 billion breakup fee if Warner backs out of its deal with Netflix.

Then, in a final attempt to secure a deal, Paramount increased its offer to $31 per share in February. This prompted the WBD board to prolong discussions with Paramount regarding a potential agreement, considering it as a superior offer. Netflix declined to increase its bid and withdrew from the negotiations.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement on February 26. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”

In addition to the billions Paramount already holds in debt, the company is also set to assume the approximately $33 billion in debt Warner Bros. Discovery holds under the agreement. The deal will be backed by a $54 billion debt commitment from Bank of America, Merrill Lynch, Citi, and Apollo Global Management, as well as $45.7 billion in equity from Larry Ellison.

Regulatory hurdles and other concerns In addition to the assumption of substantial debt posing a significant financial burden, Paramount faces several other hurdles in its deal with WBD that could impact the success of the transaction. 

For one, Ellison has warned about significant job reductions that are expected in the near future. There have already been widespread concerns among critics about potential job losses and lower wages.

Ellison is also a controversial figure in the industry, and his ownership of CBS News has been seen as sympathetic and supportive of the administration of Donald Trump, of whom his father, Larry Ellison, is a major donor. Under Ellison’s ownership of Paramount, reporting critical of the administration has been shelved or received increased scrutiny from Ellison or his appointed head of CBS News, the conservative provocateur Bari Weiss.

This has led to some concern among employees at Warner-owned CNN. Trump has personally sought concessions from news divisions critical of him, including a $16 million settlement from CBS, before his FCC would approve the Ellison takeover of Paramount. Before Netflix bowed out of the deal, Trump pressured the company to fire the former Biden White House official Susan Rice from its board. He has publicly stated his intentions to bring CNN to heel under new owners.

Regulatory scrutiny is another hurdle. Such a large-scale merger has attracted attention from lawmakers.

For instance, California attorney general Rob Bonta said in a statement on February 26 that “these two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

A day before Netflix backed out, it was revealed that a coalition of 11 state attorneys general urged the U.S. Department of Justice to review the merger under concerns it will stifle competition and increase subscription prices. This comes months after U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal voiced their concerns to the Justice Department’s Antitrust Division, warning that such a massive merger could have serious consequences for consumers and the industry at large. The senators argue that the merger could give the new media giant excessive market power, enabling it to raise prices for consumers and stifle competition.

Despite the DOJ approving the deal in June, a coalition of 12 state attorneys general filed a lawsuit on July 13 to block the merger. The suit argues it would lessen competition and harm movie theaters, cable distributors, and viewers. The coalition is led by Bonta, with Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington also joining. 

In response, U.S. District Judge Araceli Martínez-Olguín issued a 14-day pause.

When is the deal expected to close? Paramount initially aimed to finalize its acquisition of WBD as early as July. However, the transaction has now been temporarily paused until August 3, with a hearing set to assess whether the freeze will extend further.

Stay tuned…

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.