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Netflix Torpedoed Warner Bros. Discovery Stock. 2 Top Execs Scooped Up Shares.

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David Zaslav, president and CEO of Warner Bros. Discovery.

Patrick T. Fallon/Bloomberg

Warner Bros. Discovery

stock has tumbled in the short time the company was formed from the merger of

media business with Discovery. It was barely out of the gate when a woeful first-quarter report from


unnerved streaming-media investors. Four Warner Bros. Discovery executives, including President and CEO David Zaslav, just bought up more than $2.5 million of the company’s shares on the open market.

Warner Bros. Discovery (ticker: WBD) shares have dropped 26% in value since the close of April 11, the first day it traded as a new entity. For comparison, the

S&P 500 index has slipped only 2.8% in the same time frame.

Netflix (NFLX) stock has cratered 43% since the company’s earnings shocked the market after the close on April 19, while Warner Bros. Discovery stock has tumbled 25% —essentially its net drop since shares began trading just the week before. For comparison, the S&P 500 slipped 4% in that time frame. Warner Bros. Discovery has large streaming operations. Fewer now, because it is shutting down CNN+ barely a month in.

“Our goal is to maximize shareholder value, not subs,” Warner Bros. Discovery President and CEO David Zaslav said in a presentation this week. He added, “We will not overspend to drive subscriber growth.” Its streaming channels include HBO Max and Discovery+, in addition to brands Discovery Channel, CNN, and Warner Bros. Pictures. Warner Bros. Discovery itself reported first-quarter earnings before the market opened April 26, but only included operations from the predecessor Discovery company.

Zaslav paid $1 million on April 27 for 50,200 Warner Bros. Discovery shares, an average price of $19.93 each, according to a form he filed with the Securities and Exchange Commission. He now owns 4.1 million Warner Bros. Discovery shares.

Chief Financial Officer Gunnar Wiedenfels paid $500,000, also on April 27, for 25,000 shares, an average price of $19.95 each. He now owns 481,527 Warner Bros. Discovery shares.

Both Zaslav and Wiedenfels held the same posts at predecessor company Discovery, and their open-market purchases are the first by insiders at Warner Bros. Discovery. The company didn’t make them or any other insiders available for comment.

Director Robert Bennett paid $1 million over April 27 and 28 for a total of 53,000 share, an average price of $18.88 each. Bennett, managing director of private-investment firm Hilltop Investments, now owns 62,737 Warner Bros. Discovery shares in a personal account, and another 207,853 shares through Hilltop subsidiaries.

David Leavy, chief corporate affairs officer, paid $126,000 on April 28 for 6,866 shares, an average price of $18.33 each. Leavy now owns 167,176 Warner Bros. Discovery shares.

Credit Suisse analyst Douglas Mitchelson wrote in an April 27 research report that he rated Warner Bros. Discovery stock at Outperform because the company is “a global content leader with scale, and the merger can drive improvement in its streaming position, while synergies minimize the downside risk from its linear business over time.” Mitchelson has a $52 price target—more than twice the current market price.

“Certainly, the next few quarters should be messy, the macro and geopolitical backdrop adds uncertainty, and the outlook for streaming for the industry has been clouded by Netflix hitting the wall sooner than expected, but Warner Bros. Discovery shares appear far from priced for perfection,” the analyst added.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at and follow @BarronsEdLin.

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