Trader Makes Instant $5 Million Profit with Warner Bros Options Bet

A trader has made an instant $5 million profit by taking a bullish options position in Warner Bros Discovery Inc. just hours before a report that Paramount Skydance is preparing to buy a majority stake in the company. The trader spent $5.7 million on 100,000 Warner call options and sold $41 million shares in Warner Bros to hedge the position. The stock price jumped 26% after the report, making the call options "in the money" and resulting in a paper profit of $4 million to $6 million.

Warner Bros. Discovery Inc. (WBD) stock experienced a significant jump of over 20% on Thursday, September 10, 2025, following a report by The Wall Street Journal that Paramount Skydance Corp (PSKY) is preparing a bid to acquire a majority stake in the entertainment giant Paramount Plans Bid for Warner Bros. Discovery^[1]. The report sent shares of WBD soaring, with the stock price increasing by 26% from $20.00 to $25.20.

The trader who made an instant $5 million profit by taking a bullish options position in WBD just hours before the report highlights the potential impact of such rumors on stock prices. The trader spent $5.7 million on 100,000 Warner call options and sold $41 million worth of WBD shares to hedge the position. The stock price jump made the call options "in the money," resulting in a paper profit of $4 million to $6 million Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2].

The potential acquisition would be backed by David Ellison, the son of Larry Ellison, the billionaire founder of Oracle. The bid is expected to be mostly in cash, with the Ellison family providing the financial backing Paramount Plans Bid for Warner Bros. Discovery^[1]. The reported bid comes at a delicate time for WBD, which is in the process of reorganizing its sprawling media business by separating its cable networks from its streaming and studio business, similar to a move made by Comcast Paramount Plans Bid for Warner Bros. Discovery^[1].

A merger of the two Hollywood giants would reshape the media industry, uniting two of the biggest movie studios and two of the most influential news networks, CBS News and CNN Paramount Plans Bid for Warner Bros. Discovery^[1]. The deal would also consolidate their streaming operations, potentially achieving greater global scale and competing more effectively with larger rivals like Netflix and Disney+/Hulu Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2].

The Ellison family owns 100% voting control of Paramount Skydance, which closed its takeover of Paramount Global five weeks ago following FCC approval of the deal Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2]. The new owners have installed a new management team and expect to cut more than $2 billion in costs, including mass layoffs, with as many as 3,000 jobs expected to be eliminated by early November Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2].

Prior to the Skydance deal, the CEOs of WBD and Paramount had discussed the possibility of a merger in late 2023, but those talks did not progress beyond an initial exploratory meetup Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2]. The reported bid by Paramount Skydance could potentially change the landscape of the media industry, bringing together some of the most renowned news and entertainment brands under the same corporate umbrella.

References:
Paramount Plans Bid for Warner Bros. Discovery^[1] The New York Times, "Paramount Plans Bid for Warner Bros. Discovery," September 11, 2025.
Warner Bros. Discovery Shares Spike on Report David Ellison’s Paramount Skydance Readying Acquisition Bid^[2] Variety, "Warner Bros. Discovery: Stock Surges on Rumored Acquisition by Paramount Skydance," September 10, 2025.