Warner Bros. Discovery stock in focus on Wall Street after firm announces split, shares up 6.8% in pre-market Nasdaq

New York, June 9, 2025 — Warner Bros. Discovery Inc. (NASDAQ: WBD) saw its shares jump 6.8% in pre-market trading after the media conglomerate announced a long-anticipated strategic split, aimed at separating its streaming and studio operations. The move, which executives say is designed to “sharpen operational focus and maximize shareholder value,” has sent ripples through Wall Street and sparked renewed interest in the company’s long-term growth prospects.

The Big Breakup: Streaming and Studios to Go Separate Ways

The company revealed that it will spin off its streaming segment — which includes HBO Max and Discovery+ — into a standalone entity, while retaining its legacy studio and cable network businesses under the existing Warner Bros. Discovery umbrella.

CEO David Zaslav said in a statement, “This separation will empower both businesses to pursue their unique strategies and scale with greater agility. Our aim is to create two focused companies that are better positioned to compete in rapidly evolving markets.”

The spin-off is expected to be completed in the first half of 2026, pending regulatory approvals and final board clearance.

Wall Street Cheers Strategic Clarity

The announcement was met with immediate enthusiasm from investors. Shares of Warner Bros. Discovery rose 6.8% in pre-market trading on the Nasdaq, with analysts pointing to the market’s positive reception of a long-term value unlock.

“This is the boldest move yet by WBD under Zaslav’s leadership,” said Eric Handler, media analyst at Roth MKM. “It addresses a structural challenge — that streaming and traditional media have different capital needs and growth trajectories. Investors now have a clearer lens through which to evaluate each business.”

Barclays upgraded WBD stock to “Overweight” from “Equal Weight” following the announcement, citing improved visibility, potential for re-rating, and renewed interest in both streaming and legacy content assets.

Streaming in Focus: Growth with Autonomy

The newly proposed streaming entity will inherit Warner Bros. Discovery’s digital assets, including HBO Max, Discovery+, and its direct-to-consumer infrastructure. Analysts believe the spin-off could attract new digital-first investors who previously stayed away from the stock due to its complex conglomerate structure.

HBO Max’s subscriber base crossed 112 million last quarter, with strong growth seen in international markets. However, losses in the streaming segment, attributed to content spending and platform investments, have weighed on consolidated results.

“Freed from the weight of legacy businesses, the streaming arm can now pursue global expansion, niche content deals, and new monetization models,” said Lauren Martin, portfolio manager at T. Rowe Price.

Studio and Cable Networks: A Return to Core Strengths

The remaining Warner Bros. Discovery business will retain Warner Bros. Studios, CNN, TNT, TBS, and other cable properties. Executives believe the narrower structure will lead to better capital allocation and more focused operational execution.

“By focusing on content production, theatrical releases, and linear networks, the core business will return to what it does best — storytelling at scale,” said Zaslav during the company’s investor call.

Legacy content continues to be a strong revenue generator, with box office hits like Dune: Part Two and a robust syndicated catalog keeping cash flow healthy. However, ad revenue headwinds and cord-cutting trends still pose challenges.

Market Context: A Broader Industry Shift

The split follows a broader trend among media giants seeking to simplify their corporate structures. Disney, Paramount, and Comcast have all faced similar pressures to unbundle their legacy and digital assets in recent years.

Warner Bros. Discovery’s restructuring comes at a time when investor appetite is shifting toward specialization rather than diversification. According to Bloomberg Intelligence, media firms with streamlined models have outperformed conglomerates by 12% over the past year.

“This is part of the post-streaming-boom reality,” said Tom Nunan, former studio executive and lecturer at UCLA. “Investors now prefer leaner, more focused operations, especially when it comes to monetizing digital content.”

Investor Outlook: A Divided House with Higher Value?

Following the announcement, analysts raised price targets for WBD. Morgan Stanley set a new 12-month target of $18, up from $14, citing sum-of-the-parts potential.

The company’s next quarterly earnings report, due in August, will offer further clarity on the financial roadmap for both entities. Analysts will be watching closely for updates on the spin-off timeline, capital structures, and possible shareholder benefits, such as a special dividend or equity distribution.

Warner Bros. Discovery’s decision to split marks a pivotal moment in its corporate evolution. By uncoupling its high-growth streaming business from its traditional media operations, the firm is betting big on focus, flexibility, and future-proofing its relevance in a fragmented entertainment landscape.

As investors rally behind the plan, the coming months will be critical in determining whether this bold restructuring truly delivers the value Wall Street expects — or simply adds another chapter to the company’s turbulent transformation story.