NEW YORK, July 31, 2026, 16:06 EDT — U.S. regular session has ended and after-hours trading is underway.
- Shares settled at $26.29, gaining 3.2% on Friday and rising 2.0% over the week.
- On Friday, just 14.8% of Thursday’s gap to the $31 cash offer was closed.
- Paramount is scheduled to report on August 4, with WBD after on August 6, and Britain’s review concludes August 7.
Warner Bros. Discovery NASDAQ:WBD gained 3.2%, closing at $26.29 on Friday. The stock advanced after a Wall Street Journal report stated that California Governor Gavin Newsom has called for an out-of-court settlement regarding the antitrust lawsuit involving twelve states. The lawsuit challenges WBD’s deal to sell assets to Paramount Skydance NASDAQ:PSKY.
The $0.82 advance eliminated 14.8% of the per-share deal gap seen on Thursday. As of Friday’s close, roughly 85.2% of the difference persisted. Investors raised the likelihood, yet did not fully reflect a seamless closure.
Based on Q1 weighted-average shares, Friday saw an increase of approximately $2.0 billion in equity value. The outstanding basic-share difference stands at nearly $11.7 billion. These figures are initial estimates and do not factor in options, awards, or future ticking fees.
| Deal-spread measure | Value |
|---|---|
| Thursday’s closing price | $25.47 |
| Gap to base offer at Thursday close | $5.53 |
| Friday’s closing price | $26.29 |
| Gap to base offer at Friday close | $4.71 |
| Portion of prior gap closed Friday | 14.8% |
| Portion of prior gap remaining | 85.2% |
| Discount to offer now | 15.2% |
| Potential upside to base offer | 17.9% |
| Approximate value gap on basic shares | About $11.7 billion |
The Journal reported that Governor Newsom’s office urged Attorney General Rob Bonta to pursue a settlement. However, the litigation is managed independently by Bonta’s office, meaning Newsom cannot direct the withdrawal of the case.
Bonta has maintained a resolute position in public. “Once we have a trial, we’re going to win,” he stated last week. Forrester research director Mike Proulx described the process as “longer, messier, and likely more expensive.” Los Angeles Times
Friday’s surge reversed earlier volatility, ending the week up 2.0%. The 1.9% decline seen on Monday was completely retraced.
| Session | WBD close | Daily move |
|---|---|---|
| Monday, July 27 | $25.28 | -1.9% |
| Tuesday, July 28 | $25.61 | +1.3% |
| Wednesday, July 29 | $25.64 | +0.1% |
| Thursday, July 30 | $25.47 | -0.7% |
| Friday, July 31 | $26.29 | +3.2% |
| Week change from July 24 | $26.29 | +2.0% |
Weekly trading volume hit 36.5 million shares, marking the highest level of the week. WBD outperformed the Nasdaq Composite by 2.2 percentage points, exceeding its 1.0% rise.
No widespread rally was observed among key media stocks toward the close. WBD outperformed its peers, while Netflix declined. The following peer prices were noted around 15:51 EDT.
| Company | Near-close price | Friday move |
|---|---|---|
| Warner Bros. Discovery NASDAQ:WBD | $26.29 | up 3.2% |
| Paramount Skydance NASDAQ:PSKY | $7.94 | rose 1.6% |
| Comcast NASDAQ:CMCSA | $23.99 | gained 1.3% |
| Walt Disney NYSE:DIS | $96.29 | higher by 0.1% |
| Netflix NASDAQ:NFLX | $71.62 | down 2.1% |
The trend points to acquisition-fueled buying. Investors adjusted for legal uncertainty, not for WBD’s business prospects.
The timing of the deal comes with financial implications. Paramount faces a daily charge of roughly $7 million if the closing extends beyond September 30. Should the process stretch to next June, the accumulated ticking fees could reach $1.7 billion.
The parties agreed to halt closing until the litigation is resolved or until June 1, 2027. Reuters analysis shows past merger disputes typically lasted eight months. Court scheduling is therefore a crucial factor for the timeline.
WBD’s downside scenario continues to be linked to earnings. The first quarter saw gains in streaming and studios. Adjusted EBITDA was still led by Global Linear Networks, the company’s biggest segment.
| Q1 2026 segment | Revenue | Ex-FX change | Adjusted EBITDA | Ex-FX change |
|---|---|---|---|---|
| Streaming | $2.887 billion | +7% | $438 million | +17% |
| Studios | $3.125 billion | +31% | $775 million | +156% |
| Global Linear Networks | $4.377 billion | -9% | $1.634 billion | -10% |
Linear EBITDA surpassed the total for streaming and studios by approximately $421 million. This reliance is significant if the merger is unsuccessful or substantially delayed. WBD concluded Q1 holding $30.1 billion in net debt and reported negative $476 million in free cash flow.
Next week’s outlook will be shaped by three scheduled events.
| Date | Event | Time or deadline |
|---|---|---|
| Tuesday, August 4 | Paramount second-quarter report | 17:00 EDT |
| Thursday, August 6 | WBD Q2 release and earnings call | 07:00 and 08:00 EDT |
| Friday, August 7 | UK preliminary merger assessment | Deadline for review |
Britain’s review poses a risk beyond typical scheduling concerns. Film producers called on Culture Minister Lisa Nandy to examine access to archives. Nandy is set to determine if a formal intervention notice should be issued.
Risks: The spread could increase if the trial is drawn out, if UK authorities step in, or if earnings fall short. Conversely, the spread may narrow rapidly with a settlement or an expedited court timeline.
Friday’s rally reflected improved legal prospects, but did not factor in a finalized agreement.
Related articles: NASDAQ:WBD
