In a very welcome move for Warner Bros Discovery (NASDAQ:WBD) investors, WBD stock has surged roughly 7% in early afternoon trading. This move brings the year-to-date move for WBD stock to nearly 50%, making this one of the best-performing and perhaps most-overlooked stocks in the market this year.
This recent rally appears to be tied directly to yesterday’s news that CNN CEO Chris Licht is leaving the company after holding the CEO title for less than a year.
Interestingly, WBD stock surged yesterday on the news as well, marking a relatively impressive two-day rally for this media giant. Investors appear to be taking the view that many of this company’s problems were tied to leadership. As in professional sports, sometimes a change at the helm is all that’s needed to propel a group higher.
Given Warner Bros’ size, now valued at roughly $35 billion, moves such as these are uncommon. Thus, let’s dive into why this news matters and why investors appear to be taking this step as such a big positive for the company.
WBD Stock Surges As C-Suite Receives a Shakeup
Chris Licht has certainly been among the more intriguing CEOs to follow over the past year. The former CEO of CNN made some controversial moves, including a brief foray into streaming (CNN+ ultimately failed), bringing in his own people in key positions, and ultimately taking on mass layoffs at the company. Overall, it appears his stint at the helm of CNN did not inspire enthusiasm from folks within the company.
Warner Bros. Discovery CEO David Zaslav has touted his respect for Licht and also signaled that the interim leadership team taking on Licht’s responsibilities is world-class. The company is reportedly searching for a new CEO for its CNN business, with no announcements expected in the short term.
CNN’s ratings have been dismal this year, suggesting that viewers are looking elsewhere for their daily news. As with other network TV companies, finding new ways to grow will continue to be the focus of the incoming leadership team, something that has eluded the company’s news division for some time.
Perhaps fresh faces are what’s needed. But for now, the company can move past concerns around its leadership team and look forward. Investors appear to be cheering that opportunity today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.