The class action lawsuit comes as Warner Bros. Discovery shareholders have been reeling from a steep stock drop since the April merger.
Warner Bros. Discovery and its top corporate brass are facing a shareholder lawsuit that alleges false statements were made about the health of the HBO Max streaming service and its subscriber numbers to pave the way for a merger this year.
Since the merger closed in early April, Warner Bros. Discovery stock has fallen more than 50%. Warner Bros. Discovery stock was trading for more than $25 a share in early April; on Wednesday, it closed at $11.79, up 4.15% for the day. AT&T realized that it didn’t have the stomach for the big investments needed to compete in the streaming wars with tech giants, including Amazon and Apple, when the company also had to fund its expansion of its core wireless phone business.As part of the merger transaction, Discovery and AT&T shareholders each received stock in the new company, Warner Bros. Discovery.
The suit contends that Zaslav, Wiedenfels and others had an obligation to alert Discovery shareholders to the problems beforeThe 31-page lawsuit contends that AT&T’s WarnerMedia subsidiary “overstated the number of subscribers to HBO Max by as many as 10 million subscribers” because the Dallas phone giant included in the subscriber count AT&T customers who had received bundled access to HBO Max. But those AT&T customers had not signed onto the HBO Max service, the lawsuit alleged.
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