NEW YORK, Sept. 27, 2022 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed on behalf of investors who: (i) exchanged Discovery, Inc. (“Discovery”) common stock (NASDAQ: DISCA, DISCB, DISCK) for Warner Bros. Discovery, Inc. (“Warner Bros.”) common stock (NASDAQ: WBD) pursuant to Discovery’s February 4, 2022 Registration Statement on Form S-4 and Joint Proxy Statement/Prospectus filed with the Securities and Exchange Commission (“SEC”) on February 10, 2022; and/or (ii) purchased shares of Warner Bros. common stock on the open market traceable to the Prospectus.
The Complaint alleges that at the time of filing the Registration Statement and Prospectus, Defendants either knew or had access to adverse information concerning operations of the WarnerMedia business of AT&T. As subsequently disclosed by Defendants after the merger: (i) WarnerMedia’s HBO Max streaming business had a high churn rate that made the business not “viable” unless the churn rate was reversed; (ii) AT&T was overinvesting in WarnerMedia entertainment content for streaming, without sufficient concern for return on investments; (iii) WarnerMedia had a business model to grow the number of subscribers to its streaming service without regard to cost or profitability; (iv) WarnerMedia was improvidently concentrating its investments in streaming and ignoring its other business lines; and (v) WarnerMedia had overstated the number of subscribers to HBO Max by as many as 10 million subscribers, by including as subscribers AT&T customers who had received bundled access to HBO Max, but had not signed onto the service. The adverse information was not disclosed to Discovery shareholders in the Registration Statement or Prospectus or otherwise prior to the effective date of the merger. When the true details entered the market, the lawsuit claims that investors suffered damages.
Investors who purchased or otherwise acquired shares of Discovery should contact the Firm prior to the November 22, 2022 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
