WBD Medium Term Bonds

Warner Bros. Discovery, Inc.

Credit, TMT


Publicly traded companies mentioned herein: AT&T Inc (T), Netflix Inc (NFLX), Paramount Global (PARA), Warner Bros Discovery Inc (WBD)

Highlights

The presenter is short the medium term bonds of Warner Bros Discovery Inc (WBD), citing the company’s large debt stack and impaired earnings power going forward. In February 2022, AT&T announced it would spin off WarnerMedia and merge the business with Discovery via a Reverse Morris Trust (RMT). The deal closed in April 2022 but required significant debt issuances. Today, WBD carries $50B of gross debt with another $5.2B in AT&T securitization facilities. Although the stock has already experienced a macroeconomic-related sell-off from the $26 deal price to the current $10 share price, he expects continued weakness in the advertising market and linear TV to drive down Street estimates, leaving WBD without sufficient cash flow to fund the wall of maturities approaching. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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