So we have been following the potential acquisition of entertainment giant Warner Bros. Discovery (WBD) for some time now, and there has certainly been plenty to follow. We heard not so long ago that there were antitrust concerns boiling up around Netflix (NFLX) emerging as the winner. But the latest reports suggest that those may be swept away by a net win for the consumer. This news did not particularly impact shareholders in any way, as Warner shares were down fractionally in the closing minutes of Wednesday’s trading.
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The idea is a simple one, but one which comes with problems of its own. Remember how some were concerned that Netflix would basically become an unstoppable streaming titan by taking over the number four-ranked streaming operation in Max? Well, this idea works both ways. If Netflix takes Warner, then no one needs to subscribe to both services. This results in a net lowering of costs. Even if Netflix raises its prices somewhat, customers still save money by no longer paying for a second service.
Netflix has been actively working a “charm offensive,” some reports noted, in a bid to get around concerns of streaming dominance by regulators. A proposal like this could go some way toward calming those fears; a reduction of competition is one thing, but a reduction of competition by merely being a superior offering is much harder to fight.
Clawlolo Comeback
But Warner still has its own affairs to manage, even as the possibility of a new owner comes into play. And Warner has agreed to bring a familiar face—in some areas—back into play. Clawlolo has just been approved for its second season, and the dialogue-free cartoon will be airing on Warner kids’ operations throughout Europe, the Middle East and Africa (EMEA). Further, the Cartoonito YouTube channels will get access to the cartoon as well.
Clawlolo follows the adventures of Eric the Crab, who—joined by a group of similarly aquatic wildlife—takes on a range of funny and entertaining prospects. The first season already proved something of a hit, being selected for six different film festivals ranging from the London International Film Festival to the Montreal Festival Du Nouveau Cinema.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on eight Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 130.33% rally in its share price over the past year, the average WBD price target of $22.08 per share implies 10.04% downside risk.
