Billionaires Are Piling Into This Stock That Rocketed an Epic 56% Last Week

Following the trades of billionaire money managers can be an excellent starting point for spotting potential investment opportunities. These savvy investors, with their vast resources and teams of analysts, often uncover undervalued assets before the broader market catches on. 

By tracking their moves, everyday investors can identify stocks worth digging deeper into by reviewing financials, market trends, or competitive landscapes. 

However, it’s crucial never to blindly mimic their buys or sells, not even from icons like Warren Buffett. What works for a multi-billion-dollar portfolio might not align with your risk tolerance, timeline, or overall strategy. Personal due diligence is non-negotiable to avoid costly mistakes.

Last month, money managers filed their mandatory quarterly 13F reports, revealing portfolio positions as of June 30. These forms offer a window into what elite investors are prioritizing, making them a valuable tool for retail traders. 

That said, the data lags, reflecting holdings from the prior quarter, so circumstances may have evolved by the time you act. This reinforces why you shouldn’t rush to buy or sell based solely on these filings. Instead, use them as a catalyst for your own analysis. 

Yet, one stock has clearly captured their attention: Warner Bros. Discovery (NASDAQ:WBD). After surging 56% last week, it appears these billionaires might have spotted something big.

Billionaire Bets on WBD

Warner Bros. Discovery — formed from the 2022 merger of Discovery and WarnerMedia — has been a media powerhouse struggling in a shifting landscape. But in the second quarter, several high-profile investors piled in, betting on its turnaround potential. 

Legendary hedge fund manager Stanley Druckenmiller initiated a new position worth about $75 million for his Duquesne Family Office, signaling fresh interest in the undervalued media giant. Citadel‘s Ken Griffin ramped up his stake dramatically, adding 14.2 million shares for roughly $165 million, boosting his holdings significantly. Meanwhile, value investor Bill Nygren, through his firm Harris Associates, scooped up 13.4 million shares, betting on long-term recovery. 

These moves, disclosed in August’s 13F filings, weren’t chasing short-term hype but rather a strategic vision for WBD’s future.

Why the Split? WBD’s Rocky Road

The billionaires’ interest likely stemmed from WBD’s June announcement to split into two entities by mid-2026: WBD Streaming & Studios and WBD Global Networks. This restructuring aims to separate high-growth assets like HBO, Warner Bros. Pictures, DC Studios, and the Max streaming service from declining cable networks such as CNN and TNT. 

The merger saddled WBD with $38 billion in debt, exacerbating woes from cord-cutting, streaming wars, lost NBA rights, layoffs, and failed ventures like CNN’s streaming app. Since the merger, shares have plummeted 60%, with inconsistent branding and ad revenue drops weighing heavy. 

The split seeks to unlock value, allowing the studios arm to pursue dynamic growth via a portfolio containing the likes of Barbie and House of the Dragon, while isolating cable’s cash flow but also its debt burden. Analysts see potential in the move: the streaming side could fetch a 15x to 20x EBITDA multiple, versus cable’s 4x to 6x, though execution risks remain.

Takeover Buzz Ignites a Rally

Last week’s 56% rocket wasn’t tied to the Q2 buys but exploded late last week after a Wall Street Journal report revealed Paramount Skydance (NYSE:PSKY) — fresh from its $8.4 billion merger — is preparing a majority-cash buyout offer for all of WBD, backed by the Ellison family, including Oracle‘s (NYSE:ORCL)  Larry Ellison. 

Shares jumped 33% on Thursday alone, closing up another 20% Friday amid speculation of a $50 billion deal. This could consolidate streaming (Paramount+ has 77.7 million subs) to battle Netflix (NASDAQ:NFLX) and Disney (NYSE:DIS), adding franchises like Superman and sports rights. 

Analysts now whisper of a bidding war: Comcast (NASDAQ:CMCSA), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), or even Netflix might counter, especially for WBD’s studios. Yet regulatory hurdles loom under potential antitrust scrutiny, but the buzz has valued WBD at a premium, erasing months of gloom.

Key Takeaway

With PSKY’s rumored takeover, WBD suggests opportunity, but tread carefully. The bid could deliver a quick cash payout far above the current $19-ish price, especially if it sparks competition valuing the split pieces higher (analysts peg $17 to $19 per share for the standalone company). 

Debt and cable woes persist, but streaming’s IP arsenal makes it attractive. If no deal materializes, the split might still catalyze growth. For risk-tolerant investors eyeing M&A plays, it’s a speculative buy. If you’re an investor who prefers stability, hold off. But do your homework — the billionaires did.