Lawsuit accuses WarnerBros. Discovery of misleading shareholders on HBO Max subscriber numbers
WarnerBros. Discovery allegedly misled shareholders and inflated subscriber figures for HBO Max, a new lawsuit filed this month claims.
The lawsuit was brought by the Collinsville Police Pension Board, an Illinois-based shareholder of Warner Bros. Discovery stock, which it traded for Class C common shares in Discovery before a massive merger with WarnerBros. earlier this year, The Wrap reported.
“WarnerMedia was improvidently concentrating its investments in streaming and ignoring its other business lines … [and] overstated the number of subscribers to HBO Max by as many as 10 million subscribers, by including as subscribers AT&T customers who had received bundled access to HBO Max, but had not signed onto the service,” the lawsuit states.
The suit is seeking a trial by jury, alleging multiple Securities and Exchange Commission violations, the outlet reported.
A representative for WarnerBros. Discovery declined to comment.
Last month, more than five dozen staffers at HBO Max were laid off as part of the company’s restructuring and a cost-cutting effort by WarnerBros. Discovery, which is looking to make a dent in a reported $50 billion debt.
In April, AT&T and Discovery Inc. closed a massive merger for more than $40 billion in cash at close. The result was a new media company known as WarnerBros. Discovery, which houses media brands such as CNN, the Travel Channel, Cartoon Network, Discovery Channel and its streaming service discovery+, Animal Planet and others.