Warner Bros (WBD) Surges 3.94% Amid Bidding War Drama: Can the Momentum Hold?

Summary
• Warner Bros (WBD) trades at $29.375, up 3.94% intraday, hitting a 52-week high of $29.46.
• Paramount’s hostile $30/share bid and Netflix’s $27.75/share offer fuel speculation of a price war.
• Technical indicators show RSI at 82.05 (overbought) and MACD above signal line, signaling bullish momentum.

Warner Bros (WBD) is surging amid a high-stakes corporate battle between Paramount and Netflix. With shares trading near their 52-week high and technical indicators flashing bullish signals, the stock’s trajectory hinges on regulatory outcomes and shareholder sentiment. The entertainment sector’s antitrust concerns and Larry Ellison’s political ties add layers of complexity to this media megadeal drama.

Bidding War Intensifies as Kevin Mayer Predicts $30+ Share Price
Warner Bros (WBD)’s 3.94% intraday surge is driven by escalating competition between Paramount and Netflix for control of the studio. Kevin Mayer, former Disney executive and TikTok CEO, anticipates Paramount’s hostile $30/share bid will trigger a price war, pushing WBD’s valuation higher. The stock’s rally aligns with Mayer’s prediction of a $5–$10 billion price increase, as Paramount’s all-cash offer contrasts with Netflix’s $27.75/share deal contingent on regulatory approval. Analysts note that Larry Ellison’s political connections and Netflix’s market dominance could sway the outcome, creating volatility in WBD’s share price.

Options Playbook: Leveraging Bullish Momentum with WBD20251219C30 and WBD20251226C30
• RSI: 82.05 (overbought)
• MACD: 1.429 (bullish), Signal Line: 1.095, Histogram: 0.335 (positive divergence)
• 200D MA: 13.91 (far below current price)
• Bollinger Bands: Price at 29.375 (above middle band of 23.94)

Warner Bros (WBD) is in a short-term bullish trend, with RSI near overbought territory and MACD divergence suggesting momentum. Key resistance lies at $30 (52-week high) and $31.50 (psychological level). A 5% upside scenario (targeting $30.84) could trigger a breakout. The WBD20251219C30 and WBD20251226C30 options offer high leverage (91.45% and 73.16%) with moderate delta (0.33 and 0.36) and reasonable implied volatility (31.05% and 26.92%).

WBD20251219C30
• Code: WBD20251219C30
• Type: Call
• Strike: $30
• Expiration: 2025-12-19
• IV: 31.05% (moderate)
• Leverage Ratio: 91.45% (high)
• Delta: 0.33 (moderate sensitivity)
• Theta: -0.0666 (rapid time decay)
• Gamma: 0.2413 (high sensitivity to price moves)
• Turnover: 361,298 (liquid)
• Payoff at $30.84: $0.84/share (91.45% leverage amplifies gains).

WBD20251226C30
• Code: WBD20251226C30
• Type: Call
• Strike: $30
• Expiration: 2025-12-26
• IV: 26.92% (moderate)
• Leverage Ratio: 73.16% (high)
• Delta: 0.36 (moderate sensitivity)
• Theta: -0.0434 (moderate time decay)
• Gamma: 0.2196 (high sensitivity to price moves)
• Turnover: 88,354 (liquid)
• Payoff at $30.84: $0.84/share (73.16% leverage offers balanced risk/reward).

Aggressive bulls should prioritize WBD20251219C30 for its high leverage and gamma, while WBD20251226C30 offers a slightly longer runway for price discovery. Both contracts benefit from WBD’s proximity to $30 and Mayer’s bullish outlook. If $30.84 breaks, consider rolling into higher strikes.

Backtest Warner Bros Stock Performance
The backtest of Warner Bros. Discovery (WBD) after a 4% intraday increase from 2022 to the present shows mixed results. While the 3-day win rate is high at 51.61%, the 10-day and 30-day win rates are lower at 49.25% and 48.39%, respectively. This suggests that WBD tends to perform well in the short term but may face challenges in maintaining gains over longer periods. The maximum return during the backtest was 6.96%, which occurred on day 59, indicating that while WBD has the potential for positive returns, it may not consistently exceed this level.

Bidding War Drives WBD Higher: Watch for $30.84 Breakout or Regulatory Headwinds
Warner Bros (WBD)’s 3.94% surge reflects the intensity of the Paramount-Netflix bidding war, with Kevin Mayer predicting a $30+ share price. Technicals suggest a bullish bias, but overbought RSI and regulatory uncertainty (e.g., DOJ antitrust concerns) could create volatility. Investors should monitor WBD’s ability to hold above $29.46 (52-week high) and the sector leader Disney (DIS), which fell -0.25% today. A sustained move above $30.84 would validate Mayer’s thesis, while a breakdown below $28.85 (intraday low) could signal waning momentum. Action: Buy WBD20251219C30 for a high-leverage play on the $30.84 target.