In this article, we discuss 5 most important tech layoffs to watch. If you want to see more firms that recently laid off employees, check out 10 Most Important Tech Layoffs to Watch.
5. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 68
Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a New York-based media company. On August 4, Warner Bros. Discovery, Inc. (NASDAQ:WBD) reported its Q2 2022 results, posting a GAAP loss per share of $1.50 and a revenue of $10.82 billion, falling short of Wall Street estimates by $1.20 and $1.04 billion, respectively. About 70 people are being laid off in the HBO and HBO Max team, representing 14% of the total staff, as parent company Warner Bros. Discovery, Inc. (NASDAQ:WBD) carries out cost savings after the recent merger. Up to 70% of HBO Max’s development staff could be dismissed.
On August 23, Citi analyst Jason Bazinet lowered the price target on Warner Bros. Discovery, Inc. (NASDAQ:WBD) to $21 from $29 and maintained a Buy rating on the shares after the Q2 results. The analyst continues to like Warner Bros. Discovery, Inc. (NASDAQ:WBD) due to its direct-to-consumer pivot and possible synergies from its recently concluded merger.
According to Insider Monkey’s Q2 data, 68 hedge funds were bullish on Warner Bros. Discovery, Inc. (NASDAQ:WBD), up from 47 funds in the prior quarter. The collective stakes in Q2 2022 increased to $2.30 billion from $791 million in the earlier quarter.
Here is what Argosy Investors specifically said about Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its Q2 2022 investor letter:
“I purchased shares of AT&T (T) prior to its spin-off of Warner Bros. Discovery, Inc. (NASDAQ:WBD). Most people are probably familiar with AT&T. They are a major cellular service provider, and until recently owner of the Time Warner media assets, which include HBO, CNN, TNT, TBS, Cartoon Network, DC Comics and the Batman content brands, and more. At the time of my purchase, I estimated that the combined T/WBD assets traded at a 15% levered FCF yield, or 6x FCF. I also believe that WBD, which now has HBO Max, has future growth in front of it which was previously in doubt when Discovery was primarily tied to the declining cable television bundle. Since then, Netflix reported disappointing subscriber growth, which threw all streaming companies into disarray. WBD followed that news with a disappointing outlook on its business during its own quarterly earnings.
As a result, shares of WBD have declined nearly 40% since the spin-off. WBD now trades for 7x 2023E FCF and there is great potential for returns over the next few years as WBD pays down debt used to finance its merger combining Warner Brothers and Discovery and grows. We do not own a large position in WBD at present, but we may add to it over time.”
