Warner Bros Discovery (WBD, Financial) –Media conglomerate Warner Bros Discovery was the top detractor in the quarter but remained a top contributor for the first half. After a strong first quarter, the stock price faltered in the face of near-term uncertainty around the re-launch of streaming service Max. Additionally, the big budget movie The Flash has not been a success. Finally, there was well-publicized drama aroundCNN management, with CNN CEO Chris Licht leaving the company after only one year, which we believe was a positive resolution. The company remains dramatically undervalued today, and management continues to make positive operational progress to drive free cash flow (FCF) growth. We believe this company has seen the worst so will be less leveraged and more strategically positioned in the quarters and years to come. Its underlying holdings are high quality businesses that will drive FCF per share growth while also being attractive acquisition candidates.
From Mason Hawkins (Trades, Portfolio)' Longleaf Partners Fund second-quarter 2023 commentary.
