Warner Bros (WBD) Surges 5.14% Amid High-Stakes Bidding War: Who Will Win the Media Giant?

Summary
• Warner Bros Discovery (WBD) surges 5.14% to $29.71, hitting its 52-week high of $29.80
• Netflix’s $82.7B bid faces Paramount’s $108.4B hostile offer, sparking regulatory and political scrutiny
• Options volatility spikes as traders bet on outcome of historic media merger battle

Warner Bros Discovery’s stock is trading at its highest level in over a year amid a blockbuster bidding war between Netflix and Paramount. The stock’s 5.14% intraday surge reflects investor anticipation of regulatory outcomes and strategic shifts in the entertainment industry. With both bidders vying for control of WBD’s iconic assets, the stock’s trajectory hinges on regulatory approvals, shareholder votes, and the political calculus of President Trump’s administration.

Bidding War Intensifies as Netflix and Paramount Clash for WBD Control
Warner Bros Discovery’s stock has surged on the back of a $82.7 billion Netflix bid for its studio and streaming assets, countered by Paramount’s $108.4 billion hostile takeover offer. The stock’s 5.14% gain reflects investor optimism about the potential for a premium sale, despite regulatory headwinds. Netflix’s deal includes a $5.8 billion breakup fee, while Paramount’s all-cash offer—backed by Gulf sovereign wealth funds and Jared Kushner’s Affinity Partners—has drawn scrutiny over antitrust concerns and political entanglements. The stock’s intraday high of $29.80 aligns with its 52-week peak, signaling a pivotal moment in the entertainment industry’s consolidation.

Entertainment Sector Volatility as Disney Trails WBD's Surge
The broader entertainment sector remains mixed, with The Walt Disney Company (DIS) up 1.78% on the day but trailing WBD’s explosive move. Disney’s recent performance reflects cautious optimism about streaming growth, but WBD’s auction has outpaced sector peers due to its unique position in the bidding war. While Disney’s focus on Disney+ and Hulu contrasts with WBD’s strategic auction, the latter’s stock has captured investor attention due to its potential to reshape media ownership dynamics.

Options Playbook: Capitalizing on WBD's Volatility with Strategic Contracts
• MACD: 1.429 (bullish divergence), Signal Line: 1.095, Histogram: 0.335 (momentum)
• RSI: 82.05 (overbought), Bollinger Bands: $20.72–$27.16 (price near upper band)
• 200D MA: $13.91 (far below current price), 30D MA: $23.36 (support)

WBD’s technicals suggest a short-term bullish trend, with RSI near overbought territory and MACD divergence indicating potential continuation. Key levels to watch include the 52-week high of $29.80 and the 200-day moving average at $13.91. The stock’s implied volatility (IV) of 30–40% in near-term options reflects high uncertainty, making leveraged calls attractive for aggressive bulls.

Top Options Contracts:
• WBD20251219C29 (Call, $29 strike, 12/19 expiry):
- IV: 30.50% (moderate), Leverage: 28.06%, Delta: 0.709 (high sensitivity), Theta: -0.109 (rapid time decay), Gamma: 0.228 (high price sensitivity), Turnover: 707,153 (liquid)
- This contract offers high leverage and liquidity, ideal for capitalizing on a breakout above $29.80. A 5% upside from $29.71 (to $31.20) would yield a 320% return on the call.
• WBD20251219C30 (Call, $30 strike, 12/19 expiry):
- IV: 32.17% (moderate), Leverage: 56.12%, Delta: 0.455 (moderate sensitivity), Theta: -0.0858 (moderate decay), Gamma: 0.250 (high sensitivity), Turnover: 1,126,118 (highly liquid)
- This option balances leverage and time decay, suitable for a mid-term hold. A 5% price move would result in a 266% return, making it a core position for bullish traders.

Action Insight: Aggressive bulls should prioritize WBD20251219C29 for a short-term breakout play, while WBD20251219C30 offers a balanced approach for a mid-term hold. Monitor regulatory developments and shareholder voting deadlines (Jan 8, 2026) for catalysts.

Backtest Warner Bros Stock Performance
The backtest of Warner Bros. Discovery (WBD) after a 5% intraday surge from 2022 to the present shows mixed results. While the 3-day win rate is relatively high at 51.61%, the 10-day win rate is slightly lower at 49.25%, and the 30-day win rate is 48.39%. This indicates that WBD tends to perform well in the short term but shows more volatility in the medium to long term.

Act Now: WBD's Bidding War Could Fuel Further Volatility—Here's How to Position
Warner Bros Discovery’s stock is poised for continued volatility as the bidding war between Netflix and Paramount unfolds. With regulatory scrutiny and political dynamics in play, the stock’s trajectory will hinge on shareholder votes and antitrust reviews. The Walt Disney Company’s 1.78% gain underscores sector-wide optimism, but WBD’s unique position in the auction makes it a high-conviction trade. Investors should prioritize options with high leverage and liquidity, such as WBD20251219C29 and WBD20251219C30, to capitalize on potential price swings. Watch for a breakdown below $28.855 (intraday low) or a regulatory green light for either bid—either outcome could trigger a sharp move.