Warner Bros. Discovery heads into its June 9 earnings call with a notable shift in options sentiment — put demand has quietly eased while the insider overhang from March remains unresolved.
The most interesting development this week is in the options market. WBD's put/call ratio has dropped to 2.17, down from a peak of 2.86 in late April and below its 20-day average of 2.36 — a full standard deviation lighter on downside hedging than recent norms. That's a meaningful rotation: the defensive positioning that dominated April has unwound heading into the next quarterly test. The PCR is still structurally elevated relative to the broader market, reflecting the stock's media-transition uncertainty, but the direction of travel is toward less fear rather than more.
Short interest offers little additional drama. At 2.4% of the free float, short positioning is low by any standard — and it has been drifting lower, down roughly 1.7% over the past month. Borrowing costs remain nominal at 0.39%, and availability is effectively unlimited, with nearly 2.5 billion shares available to lend against roughly 60 million borrowed. There is no squeeze setup here, no borrow squeeze pressure, and no sign that bears are loading up ahead of June 9. The short score of 32 confirms this is not a heavily contested name in the lending market.
The Street remains cautious but not hostile. The consensus mean price target of around $29.65 implies modest upside from the current $27 close. Recent analyst activity has been broadly neutral — UBS nudged its target to $31 while holding Neutral after the May results, and Guggenheim reiterated Neutral without a target. The most notable move in the window was Raymond James downgrading to Underperform in late February, a signal that at least one firm sees the risk/reward as asymmetrically negative. Bulls point to HBO Max momentum, strong content licensing, and the pending Paramount transaction. Bears keep returning to structural cord-cutting pressure in the Networks segment and declining ad revenue — the same headwinds that have defined the WBD story for two years. The EV/EBITDA multiple of 11.7x has barely moved over the past month, suggesting the market isn't rewarding or punishing execution right now so much as waiting for evidence.
The institutional picture has some activity worth noting. Millennium Management added roughly 18.3 million shares in Q1, and Citadel built a position of 17.6 million shares in the same period — both meaningful new commitments from fast-money managers. Balyasny also added nearly 16 million shares. Against that, Sessa Capital trimmed by 13.6 million shares. The net read is that event-driven and multi-strategy funds have been building exposure, which fits the profile of a name with a catalyst — the June print and potential Paramount deal progress — rather than a structural long thesis.
The insider picture hasn't changed since last week's note, but it continues to cast a shadow. Net insider sales of roughly $262 million over 90 days, executed almost entirely in the $27.20–$27.95 band, still sit above the current $27.00 close. The stock has slipped roughly 26% over the past month, meaning those sellers timed their exits near the recent high. The June 9 earnings call is now the first meaningful opportunity for management to either validate or challenge the narrative those sales created.
What to watch: whether the EPS momentum scores — both the 30-day and 90-day readings rank in the 100th percentile, the highest possible level — translate into an actual beat on June 9, and whether the Paramount transaction timeline gains any clarity on the call.
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