Warner Bros. Discovery Shares Tumble 5% Amid Max Relaunch

With Wall Street watching closely, the entertainment giant’s stock ends Wednesday’s trading session at $14, down more than 5%

The new logo for Max, Warner Bros. Discovery's replacement for HBO Max
The new logo for Max, Warner Bros. Discovery's replacement for HBO Max

Shares of Warner Bros. Discovery fell over 5% on Wednesday after executives unveiled the entertainment giant’s new combined streaming offering, Max.

The relaunch comes as the entertainment giant has been undergoing a major restructuring, which it expects to complete by the end of 2024. WBD estimates the moves, including layoffs and other cost cuts, will result in up to $5.3 billion in restructuring charges before taxes, including up to $3.5 billion in content impairment and development write-offs.

Pricing on Max remained largely unchanged, with an ad-supported tier costing $9.99 per month and a new, premium tier costing $19.99 per month. The core service continues to cost $15.99 per month.

During Morgan Stanley’s Technology, Media & Telecom Conference in March, chief financial officer Gunnar Wiedenfels said Max would be “absolutely critical” to Warner Bros. Discovery’s streaming efforts.

“For the first time, we’re going to be able to put all the content together. We believe that that’s going to have positive impacts on engagement, on churn, on subscriber acquisition,” Wiedenfels explained. “So, all the way through that entire value driver tree, we believe we’ll see improvements.”

On the company’s fourth-quarter earnings call, Wiedenfels warned that the combined offering would increase marketing and content costs in the short term. He reaffirmed the company’s plan to break even on streaming in 2024 and deliver $1 billion in profits in 2025, and said the company continued “to track above our internal plans.”

In addition to Max, Discovery+ will continue as a separate, lower-priced service. The company also plans to launch a free, ad-supported streaming service this year. As of the end of 2022, Warner Bros. Discovery had a total of 96.1 million direct-to-consumer subscribers across HBO Max and Discovery+.

Despite Wednesday’s dip, the company’s shares are still up more than 47% year to date.