Shares of Warner Bros Discovery Inc (NASDAQ:WBD, ETR:J5A) rose nearly 5% on Wednesday after CNBC reported the media conglomerate is considering a split that would separate its legacy cable networks from its film studio and streaming businesses.
The proposed move, which has not been formally announced, would see the company spin off its linear cable and news assets into a separate entity while keeping its film studios, including DC, and streaming platform Max, according to CNBC’s David Faber, citing people familiar with the matter.
"We could get some sort of an announcement in the not too distant future that they are trying to split the company," Faber said during a segment on the business network.
The stock initially dipped following a first-quarter earnings report that missed Wall Street estimates on both revenue and profit. However, it rebounded as investor optimism grew around the potential breakup.
The linear TV segment has long been seen as a drag on Warner Bros. Discovery’s performance, especially as audiences continue to shift toward streaming.
Despite the earnings miss, the company reaffirmed its outlook for its streaming unit, which has been a bright spot in recent quarters.
The report comes as Warner Bros. Discovery navigates a heavy debt load of around $38 billion and faces intensifying competition from media peers, including Comcast Corporation (NASDAQ:CMCSA, ETR:CTP2), which is reportedly preparing its own spin-off.