The European Union cleared Paramount's acquisition of Warner Bros. Discovery. U.S. state attorneys general are challenging it. Two groups of bureaucrats now disagree about whether Americans should care that streaming services nobody watches will consolidate into one streaming service nobody watches.
Paramount owns Paramount+. Warner Bros. Discovery owns Max. Combined monthly active users who aren't using free trials or their ex-girlfriend's password: eleven. The EU concluded this merger poses no threat to competition because you can't threaten something that doesn't exist.
American states filed suit anyway. They worry the combined entity might raise prices. They're correct. The new company will raise prices immediately. Subscribers will pay $19.99 per month to watch NCIS reruns and whatever reality show about people who flip houses in Utah that Max is currently auto-playing at 3am. Then they'll cancel. Then they'll resubscribe three months later when they remember they wanted to watch that one show. This is called a business model.
The technical setup remains unchanged. Support at zero. Resistance at zero. Volume: who gives a sh*t. Retail traders are currently Googling "how to buy shares of a merger before it happens" and "is Warner Bros the same as Warner Music." It isn't, but that won't stop them.
The chart shows a clear double-top formation in the number of regulators who have opinions about this. The moving average of people who will benefit from this transaction continues to trend toward management stock options. The Fibonacci retracement indicates I should have gone to law school.
Both companies lose money. The merger will help them lose money more efficiently. Shareholders will celebrate the synergies. Synergies is what executives call firing everyone who works in accounting so they only have to have one person who doesn't understand the numbers.
The deal closes in six months, gets unwound in two years, and somehow the investment bankers keep the fees.
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