It's literally stupid. The fact is that Warner Bros and Discovery couldn't make it work. Too much debt. Slash and burning costs didn't work.
Zaslav's solution is... to sell. So which idiot would then takes on WBD's debt - and borrow more debt - to acquire the thing (and not even the whole thing)?
Zaslav got a "get out of jail free" card there. And I'm sure there are plenty of shenanigans involved. Maybe not accounting, but I remember when I gave up on it I had a suspicion they were cutting more than just "noncore" expenses.
The more I think about it, the more I realise t's a shitshow. I've never read anything so stupid since Salesforce and Slack. I just can't believe it. Netflix are going to bankrupt themselves over something they never needed. If they're lucky, they'll be able to spin off (no pun intended) parts but it just seems so excessive.
I don't care what franchises you own, if you borrow $100 for something worth $5 on scale, you're bound to have a terrible result. And, yeah, I'm saying the equity of WBD should be much closer to zero.
I mean, come on, WBD was literally a distressed equity play this time last year because their efforts to purge the debt were to be in vain. What the hell changed? Worse, what are NFLX thinking?
This is more "bubble"-y along with the private credit stuff than AI imo. It's leverage on steroids for something that's going to depreciate and become less relevant over time. I've never shorted in my life but, my gosh, I'm tempted now. |
