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Published December 18, 2024
When entertainment giant Warner Bros. Discovery, Inc. recently announced that it had taken a $10 billion, investors weren’t amused. Shareholders quickly dumped their stock, causing Warner Bros.' stock price to tumble 9% overnight. Some of those shareholders have now filed a lawsuit against the company.
In February, Warner Bros. announced that it was renegotiating its contract with the NBA, which was a centerpiece of the company’s entertainment line-up, but those negotiations ran long. In August, the company issued its financial results, and investors were shocked when the company announced a $10 billion write-down for the value of the company’s brands and networks.
According to the lawsuit, Warner Bros.' executives should have known that lengthy negotiations would hurt the brand’s value. Plaintiff also claims that Warner Bros. executives should have known the brand was overvalued in the first place, which would result in the hefty write-down. Nonetheless, Warner Bros. executives let investors buy WBD stock at an inflated price.
Now, some of those angry investors are joining the lawsuit.