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Warner Bros. Discovery, Inc. Securities Litigation

Title:                          Collinsville Police Pension Board On Behalf Of The Collinsville
                                  Police Pension Fund, Individually And On Behalf of All Others
                                  Similarly Situated
v. Discovery, Inc., Warner Bros. Discovery,
                                  Inc., David Zaslav, And Gunnar Wiedenfels
, No. 1:22-cv-08171

Court:                        United States District Court for the Southern District of New York

Company Name:       Warner Bros. Discovery, Inc.

Securities:                  WBD (NYSE)

Class Period:              Investors who purchased or exchanged WBD common shares
                                   pursuant to the Registration Statement and Prospectus
                                   or who purchased WBD common shares on the open market
                                   from April 11, 2022 through September 23, 2022

On September 23, 2022, Wolf Popper filed a class action lawsuit for violation of the federal securities laws in the U.S. District Court for the Southern District of New York against Discovery, Inc. (“Discovery”) and Warner Bros. Discovery, Inc. (“Warner Bros.”) and certain of the Company’s senior executives (collectively, “Defendants”) on behalf of investors who (1) exchanged Discovery common stock for Warner Bros. common stock pursuant or traceable to Discovery’s February 4, 2022 Registration Statement on Form S-4 and Joint Proxy Statement/Prospectus filed with the Securities and Exchange Commission on February 10, 2022, or (2) purchased shares of Warner Bros. common stock on the open market traceable to the Prospectus through the date of the filing of the complaint (the “Class”).

A copy of the complaint is available by clicking here.

WBD is a global media and entertainment company that creates and distributes a portfolio of content and brands across television, film and streaming.

The complaint alleges the Defendants made materially false and misleading statements and omitted material facts in the Registration Statement and Prospectus for Warner Bros. common stock.  The complaint’s allegations relate to the merger between Discovery and the WarnerMedia business of AT&T (the “Merger”).  The Merger was announced on May 17, 2021 and closed on April 8, 2022.  Pursuant to the Merger, Discovery combined its business with WarnerMedia to form Warner Bros. 

At the time of filing the Registration Statement and Prospectus, Defendants either knew or through the exercise of reasonable diligence would have known material adverse information concerning operations of the WarnerMedia business.  Among other things, as subsequently acknowledged by Defendants after the Merger, (i) WarnerMedia’s HBO Max streaming business had a high churn rate that made the business not “viable” unless the churn rate was reversed, (ii) AT&T was overinvesting in WarnerMedia entertainment content for streaming, without sufficient concern for return on investments, (iii) WarnerMedia had a business model to grow the number of subscribers to its streaming service without regard to cost or profitability, (iv) WarnerMedia was improvidently concentrating its investments in streaming and ignoring its other business lines, and (v) WarnerMedia had overstated the number of subscribers to HBO Max by as many as 10 million subscribers, by including as subscribers AT&T customers who had received bundled access to HBO Max, but had not signed onto the service.   This adverse information was not disclosed to Discovery shareholders in the Registration Statement or Prospectus or otherwise prior to the effective date of the Merger.  Rather, Defendants represented in the Registration Statement and Prospectus that as a result of the Merger that WBD was expected “to be better able to compete globally in the fast-growing DTC landscape against the global streaming leaders,” and on a February 24, 2022 conference call, that “[u]pon closing, [WBD] will stand on incredibly solid footing creatively and financially.” 

As a result, the Registration Statement and Prospectus and certain of the Defendants’ other public statements, contained untrue statements of material fact or omitted to state material facts required to be stated therein or necessary to make the statements therein not misleading, in violation of Sections 11 and 12(a)(2) of the Securities Act.

From April 11, 2022, the first trading day after completion of the Merger, to the last trading day prior to filing of this Complaint (September 23, 2022), Warner Bros. market price fell by 52.4%, from $24.78 to $11.79 per share, as the market became aware of the foregoing misrepresented and omitted facts.

If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than Tuesday November 22, 2022, which is 60 days after the publication date of this notice.  Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.

For further information about this case, contact:

Robert C. Finkel

Joshua W. Ruthizer

Sasha D. Marseille

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