New York’s Bernstein Liebhard LLP and Rosen Law Firm, L.A.-Pennsylvania firm Schall Law, and the Collinsville Police Pension Board, at least, are filing class action lawsuits against Warner Bros. Discovery (WBD) on behalf of that company’s investors. Investors who have seen WBD stock price drop more than 50% since its first day of trading after the companies’ merger in April.
The filings are all similar in nature, and argue that at the time of the WarnerMedia-Discovery merger both companies knew or had access to adverse information concerning operations of WarnerMedia while it was still owned by AT&T.
Among the claims, the filings argue that WarnerMedia’s HBO Max streaming business had a high churn rate which made the business not viable unless that rate was reversed. Another common claim is that AT&T was overinvesting in streaming content without sufficient concern for return on investments and that Warner’s business plan to grow the number of HBO Max subscribers was formulated without regard to cost or profitability.