An Illinois police pension fund is suing Warner Bros. Discovery, alleging that Warner Bros. defrauded investors by misrepresenting the number of HBO Max subscribers during its merger with Discovery, according to media sources.
The Foundation, a shareholder of Illinois-based Warner Bros. Discovery, had reportedly accepted shares of WBD (Warner Bros. Discovery) in exchange for Class C common stock (Discovery stock) prior to the merger. As part of the merger, they (Warner) issued more than 700 million shares of WBD stock to Discovery common and preferred stockholders.
The lawsuit names Warner Bros. Discovery CEO David Zaslav and CFO Gunnar Wiedenfels as defendants, alleging that in several instances of hidden “adverse information,” Warner Bros. Discovery misrepresented information about HBO Max subscribers and significantly inflated the actual number of subscribers to the service.
Previously, HBO Max also saw some strategic shifts after Warner announced the merger, with the platform no longer focusing on live-action children’s and family programming and suddenly canceling many animated series. Some were even taken off the air entirely, and layoffs occurred at both HBO Max and Warner Bros. Discovery.