TLDR
- Seaport Research Partners downgraded WBD to Neutral from Buy following the merger pause
- Paramount Skydance halted its $31/share acquisition until legal issues are resolved or June 1, 2027
- 12 states and the Writers Guild of America are challenging the $110 billion deal on antitrust grounds
- Seaport also cut Q2 revenue estimates by $236 million to $9.07 billion after Supergirl’s weak box office
- WBD stock dipped to $25.60, a 21% discount to the agreed acquisition price
Warner Bros. Discovery stock slipped 0.7% to $25.60 ahead of Monday’s open, sitting at a 21% discount to the $31 per share Paramount Skydance agreed to pay.
Warner Bros. Discovery, Inc., WBD
That gap now looks harder to close after Paramount paused the deal on Friday, sending a clear signal to Wall Street that the road ahead is long.
Seaport Research Partners moved quickly, downgrading WBD to Neutral from Buy on Sunday.
Analyst David Joyce summed it up plainly: “With this additional delay and potential uncertainty, we think there are better areas to deploy capital.”
Paramount agreed back in February to acquire Warner in a cash deal valued at $110 billion. The transaction has since run into a wall of legal opposition.
Twelve U.S. state attorneys general and the Writers Guild of America have challenged the deal, arguing it breaks antitrust laws. Paramount said it will hold off until those challenges are resolved — or until June 1, 2027, whichever comes first.
Seaport noted that while pausing may reduce the risk of a near-term court injunction, it also pushes back integration plans and delays any expected synergies from the merger.
Investors are now looking at an extended period with little visibility on the legal timeline or deal progress.
Supergirl Adds to the Pain
The merger drama isn’t the only problem weighing on WBD right now.
Joyce also cut his Q2 estimates, pointing to the disappointing box office run of Supergirl.
The film pulled in just $124 million globally — not enough to cover production costs, let alone what was spent on marketing.
Seaport trimmed its Q2 2026 revenue estimate by $236 million, bringing it down to $9.07 billion. Adjusted EBITDA was cut by $219 million to $1.83 billion.
Soft Ad Market Compounds Pressure
A weaker advertising environment is adding more pressure heading into summer.
With no FIFA World Cup, NBA playoffs, or NHL Stanley Cup games filling screens this season, advertising demand has softened.
That absence of major sports content is a meaningful headwind for WBD’s ad-supported businesses.
Warner is set to report its Q2 earnings before the market opens on August 6.
Paramount’s own results are due after the closing bell on August 4, which may offer the first meaningful read on how both companies are framing the deal’s future.
For now, WBD trades at that 21% discount to the agreed deal price — a reflection of just how much doubt the market has built into this merger.
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