WBD Stock Today: Larry Ellison’s $40.4bn Guarantee Boosts Paramount’s Hostile Bid on December 22
Larry Ellison has given an irrevocable $40.4bn personal guarantee to back Paramount’s $30-per-share cash bid for Warner Bros Discovery. The move seeks to settle funding doubts and sway WBD holders ahead of the 21 January tender deadline. On 22 December, WBD rose about 3%, PARA gained roughly 7%, and Netflix ticked lower as traders weighed deal odds and antitrust risk. For UK investors, this is a live US special situation with currency, timing, and spread to assess. We explain what changes now, the price action, and how to position with discipline.
Ellison’s guarantee: why it changes the bid math
Larry Ellison’s guarantee is personal and irrevocable, which directly reduces funding and bridge-debt risk. It makes the $30 cash price more credible and may increase tender participation from risk-averse holders. Reporting confirms the scale and intent of the backstop, which aims to firm up confidence in a Warner Bros Discovery takeover source. This support narrows the typical merger-arbitrage discount and raises the bar for any rival or revised bids.
The offer targets a 21 January deadline, keeping pressure on boards and shareholders. Holders who tender face proration risk if acceptances exceed planned size, and non-tendering holders face deal-break risk. Cross-border investors should note USD settlement and US tax forms. Coverage highlights how Larry Ellison’s move aims to accelerate decisions before the cut-off source. Read the offer document closely and track any amended terms.
How the market is pricing the risk today
WBD closed at $28.75, up 3.53%, with a $28.47 to $28.98 range. RSI is 67.92 and ADX 50.10, signaling a strong uptrend near overbought. Price sits above the 50-day average of $23.25 and the 200-day of $14.62, with Bollinger bands at $31.49 upper and $26.64 middle. A clean break above $28.98 opens $30, while failures near the upper band can invite pullbacks to the $26.50 area.
WBD trades on a 151.32 P/E, with a free cash flow yield near 5.71%. Street targets cluster below spot, with a $29.50 high, $22.00 median, and $21.83 consensus. Ratings show 8 Buy and 6 Hold, no Sells. That gap implies downside if the deal fails, and limited upside beyond $30 if it closes. Larry Ellison’s backstop tightens the spread, but fundamentals still matter.
Two competing paths: Paramount vs Netflix
The Paramount WBD tender offer seeks control via cash at $30 per share. A rival path in focus is a potential Netflix HBO Max deal that targets assets instead of the whole company. The first route could drive larger synergies but needs more approvals. The second may face a simpler process but still raises content and distribution questions. Larry Ellison’s support tilts momentum toward cash certainty today.
A full Warner Bros Discovery takeover by Paramount would be reviewed for concentration across studios, streaming, and TV networks. UK scrutiny could include the CMA due to UK operations like Channel 5. An asset-led route could still draw questions on content exclusivity and market power. Expect timetable risk if agencies seek remedies. Larry Ellison’s backing helps on financing, not on regulatory timelines.
What UK investors can do now
Treat this as a deal-driven trade rather than a long-term call. Consider trimming into strength near $30, set clear exit rules, and avoid oversized positions. Manage USD exposure with FX-aware sizing or hedges if needed. Larry Ellison’s guarantee reduces funding risk, but outcome risk remains. Keep cash ready for volatility spikes and avoid chasing breakouts without a stop and a defined reward-to-risk.
Circle 21 January for the tender deadline and watch for amended terms, rival bids, or board statements. Track WBD volume versus the 46.66m average and how price reacts near $30. Watch spreads to the offer price, option implied volatility, and any regulatory headlines. A sustained hold above $28.98 strengthens the bull case, while a drop below the middle Bollinger band near $26.64 weakens it.
Final Thoughts
Larry Ellison’s $40.4bn personal guarantee tackles the key concern that often drives merger spreads: financing certainty. It strengthens Paramount’s $30 cash pitch and improves near-term confidence, but it does not remove regulatory or execution risk. Prices near $30 limit upside if the deal closes, while failure could reset WBD closer to prior averages. UK investors should focus on process milestones, spreads, and risk control. Use disciplined sizing, mind FX exposure, and watch price versus $28.98 and $30. If terms improve or a rival appears, spreads can change fast. Stay data-led, react to filings, and avoid emotional trades in a headline-heavy tape.
FAQs
It reduces funding risk. Larry Ellison has offered an irrevocable personal guarantee that supports Paramount’s cash at $30 per share. That makes the offer more credible for banks and target shareholders. It can narrow the merger spread because arbitrage funds gain confidence they will be paid if approvals land. It does not solve regulatory timing or remedy demands. If regulators delay or require asset sales, the timeline can slip. Still, the backstop raises the probability that financing is not the reason the deal fails.
It depends on your risk and time horizon. The Paramount WBD tender offer provides cash clarity at $30, but tenders face proration if acceptances exceed the target amount. If the deal closes, upside from here may be capped by the offer price. If the deal fails, downside could be significant given Street targets below spot. Consider position size, alternative uses of capital, and taxes. Many investors hold a partial stake and keep dry powder for headlines before 21 January.
Potentially, since an asset-led deal can be simpler than a change of control, but it still faces scrutiny. A Netflix HBO Max deal could trigger questions on content exclusivity, distribution power, and consumer choice. A full Warner Bros Discovery takeover by Paramount would also draw attention to studio and streaming concentration, plus possible UK CMA interest. Financing looks stronger after Larry Ellison’s move, yet the biggest risks are timing, remedies, and whether regulators push for divestments that alter deal economics.
Focus on the spread to $30, volume trends against the 46.66m average, and whether WBD can hold above $28.98. Watch for amended terms, rival bidders, or board recommendations that change the odds. Factor USD exposure into position sizing or use forex hedges if needed. Read official filings rather than relying on social chatter. Larry Ellison’s guarantee helps confidence, but filings, regulatory notices, and tender updates are what move spreads and the share price.
Near term, $28.98 is the intraday high to clear, then $30 is the obvious ceiling. Bollinger bands show $31.49 upper and $26.64 middle, while RSI at 67.92 flags near overbought conditions. The 50-day average is $23.25 and the 200-day is $14.62, both rising. Valuation sits at a 151.32 P/E with an estimated 5.71% free cash flow yield. Street targets include a $29.50 high and $22.00 median, which frame upside and downside if the deal outcome shifts.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
