AT&T-Discovery deal intensifies the streaming wars 🥊
Tuesday, 18th May 2021 by Gotrade
Hey Gotraders,
If you thought the streaming space was already crowded, think again. There’s a new player in town.
AT&T (T) announced yesterday that they will be combining its WarnerMedia movie and media content division with Discovery. This deal will result in a new streaming company that could be valued as much as $150 billion. The newly merged company will have a new name (to be released later) and will be co-owned by the current shareholders of both companies.
AT&T said it would receive an aggregate amount of $43 billion in cash, debt, and WarnerMedia’s retention of certain debt. AT&T shareholders would receive stock representing 71% of the new company, while Discovery shareholders would own 29%.
If approved by regulators, the deal is expected to close in mid-2022.
“It is super exciting to combine such historic brands, world-class journalism, and iconic franchises under one roof and unlock so much value and opportunity” - Discovery President and CEO David Zaslav. Zaslav also said that AT&T and Discovery’s assets “are better and more valuable together.”
Why is this important? The new company will be bigger and stronger and they would have the resources to take on the other streaming giants in the industry. Zaslav thinks that the new company could eventually attract up to 400 million streaming subscribers. Netflix (NFLX) has around 208 million global subscribers, while Disney+ by Disney (DIS) recently surpassed 100 million subscribers. Question here is - will the smaller players be able to survive? Hmm…
📈 Sanofi & GlaxoSmithKline report positive early-stage clinical trial results for their Covid vaccine 💉
Some good news on the vaccine front. Sanofi (SNY) and GlaxoSmithKline (GSK) have said that their experimental Covid vaccine has shown very positive results in their early-stage study, with efficacy rates of between 95-100%! Wowza! They plan to begin phase 3 of clinic trials in a few weeks.
Sanofi stock closed at $53.49, up 1.42% while GSK stock closed at $39.59, up 1.31%.
📉 Stocks of streaming companies slip after AT&T-Discovery news 👎
Shares of streaming giants closed down following the news of the AT&T-Discovery deal! No surprise there, considering that the new media company will be a strong competitor in the already crowded streaming space.
Netflix (NFLX), Disney (DIS), and Comcast (CMCSA) closed down 0.90%, 2.08%, and 5.50% respectively.
Top movers & shakers 🎢
What else is making headline news 📰
All eyes on Walmart+ by Walmart (WMT) - Investors want to know if the service is creating more loyal customers.
Michael Burry of ‘The Big Short’ reveals a $530 million bet against Tesla (TSLA).
Elon Musk clarifies that ‘Tesla (TSLA) has not sold any Bitcoin’.
Tencent Music (TME) beats profit estimates on subscription growth.
Popular companies releasing earnings this week 💰
Tuesday: Walmart (WMT), Home Depot (HD), Sea (SE), Baidu (BIDU), Trip.com (TCOM), Take-Two Interactive (TTWO), Advance Auto Parts (AAP), Ascendis Pharma (ASND)
Wednesday: Cisco (CSCO), Lowe’s (LOW), JD.com (JD), Target (TGT), TJX (TJX), Analog Devices (ADI), Synopsys (SNPS), Copart (CPRT), Keysight (KEYS), Futu (FUTU), Victoria’s Secret (LB)
Thursday: Applied Materials (AMAT), Ross Stores (ROST), Hormel Foods (HRL), Plug Power (PLUG), Polo Ralph Lauren (RL), Deckers Brands (DECK), Manchester United (MANU), Apartment Investment (AIV)
Friday: John Deere (DE), VF Corp (VFC), Booz Allen (BAH)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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