HBO's Dragon Balloon Soars As Warner Bros. Sinks To 52-Week Lows: What It Will Take For Stock To Rebound?

Warner Bros. Discovery, Inc. WBD is grappling with a significant decline, trading near its 52-week low of $6.94, which it reached on June 20. The stock has plummeted 42.45% over the past year and 38.31% year-to-date, highlighting the company's struggle to regain its footing in a fiercely competitive media and entertainment landscape.

House Of The Dragon – Can This Fire Up The Stock?

As part of a bold promotional campaign, HBO, a Warner Bros. subsidiary, has placed a colossal 270-foot balloon atop the Empire State Building to herald the second season of “House of the Dragon,” the latest prequel in the Game of Thrones saga.

The Queen of the Dragons has arrived. #HOTD @HouseofDragon pic.twitter.com/wSsVBz4FC6

— Empire State Building (@EmpireStateBldg) June 16, 2024

The spectacle, featuring a dragon wrapped around the iconic skyscraper, aims to ignite excitement and draw viewers to HBO’s streaming service.

Per the company’s earnings report from last month, Warner Bros. Discovery had missed Q1 expectations. TV ad sales were down 11% and streaming revenue was flat at $2.5 billion. Despite streaming ad sales rising 70% to $175 million, content revenue dropped 46% and distribution increased slightly by 1%.

Meanwhile, the dragon balloon promotion has garnered mixed reactions from fans and critics alike. While some praise the creativity, others deem it an unnecessary expense during a period of financial instability for the company.

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Technical Signalling Further Declines Ahead

Despite the grand gesture, Warner Bros stock's technical indicators are dismal.

Trading below its 5, 20, and 50-day exponential moving averages, Warner Bros. Discovery is facing intense selling pressure, signaling potential further declines.

Chart: Benzinga Pro

The share price of $7.16 is below its 8-day simple moving average of $7.48, its 20-day SMA of $7.83, and its 50-day SMA of $8.02, reinforcing the bearish outlook.

As Warner Bros. Discovery battles to boost its stock price and streaming service subscriptions, the coming months will reveal if such high-profile promotions can truly turn the tide for this beleaguered entertainment giant.

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Image created using artificial intelligence via Midjourney.