WBD Up For Sale, GM Leads Earnings Winners, Starboard Value CEO Jeff Smith 10/21/25

David Faber (0:00)

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Carl Quintanilla (0:12)

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David Faber (0:13)

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Jim Cramer (0:45)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:58)

Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post 9 of the New York Stock Exchange. Faber's at the 13D Monitor Active Passive Investor Summit in New York. We'll get more on that in a moment. Speaking of David, he's got some breaking news on WBD. David?

David Faber (1:14)

Yeah, Carl, yeah, a story we've been following closely, of course, has been Paramount's interest in trying to buy all of Warner Bros. Discovery. As I've reported previously, those talks have continued for quite some time privately, in which Paramount has made an increasing number of bids. Unclear to me exactly where they ended up, but here's the news this morning. Warner Bros. is putting itself up for sale, saying that it has evaluating or it will evaluate a broad range of strategic options that obviously will include selling the entire company. It doesn't mean they're abandoning the plan as well to split the company. That of course has been the plan that's been in place for quite some time, and one that many expected they might continue to pursue even with Paramount's interest. But that being said, citing what is interest from multiple parties, my belief, my reporting indicating all those parties other than Paramount have been interested in buying the streaming and studio business. But nonetheless, citing all of those multiple parties, again, not naming those parties, but citing multiple parties, the company has said that it will initiate a review of strategic alternatives to, of course, what they always say, maximize shareholder value. And so that process will begin. Now, they already have in hand a bid from Paramount. I reported previously, you know, perhaps a range of 22 to 24, largely made up of cash. At some point, I expect to be able to sort of get a sense exactly where Paramount ended their bidding, so to speak, privately. But now this will become a sort of a public story, if you will. As you can take a look at Warner Bros. stock moving up a bit. Remember where it came from, of course, before all of the speculation began, with the Wall Street Journal story discussing Paramount's interest in mounting a bid for the company. Stock was somewhere around 12 bucks a share. This also would involve potentially a change in the structure of the spin itself, so that any company that did want to buy streaming and the studio would be able to do so with a bid now, while global networks would be spun off at before the close of that deal.

It gets somewhat complex, but it basically would involve making the Remain Co streaming in studio as opposed to the current structure, under which the Remain Co, so to speak, would be global networks, made up by, of course, all of the linear cable networks. In doing that, you might be able to avoid a lot. You would get some tax, what we call leakage. In other words, there would be some losses to taxes, but the belief is it would not be significant and therefore would enable, well, you name it, Jim, I don't know. Would Netflix be interested? Our parent company, at least for the next couple of months, Comcast, in that structure, would it be interested?

Jim Cramer (4:02)

Would the likes of an Apple or an Amazon or any of them? Because at least they'd have something that goes up.

You got the lowest PE multiple in the S&P 500 You're not going to go lower than that. You see, because there's 500 stocks in the S&P. If there were 600 stocks, that'd be a different story. But there's 500 So you go buy that, your PE multiple goes up.

David Faber (4:25)

Conceivably, that's the case. Now, of course, you do run into the regulatory side of it. And Jim, you know, this administration plays an important role in a lot of deals, particularly when it comes to media, given the president's preferences. And there has been an outstanding belief that obviously Larry Ellison and his son David Ellison, who runs Paramount, Larry Ellison, who is a lot of the money behind any said bid for Warner Bros. Discovery, is in a favorable position with the Trump administration. Not so, not so for Brian Roberts. We know that. I can't speak to whether Netflix is in a somewhat favorable position or not, or any of the other bidders. And so you do have to wonder in terms of a regulatory path, who would have the easiest time, perhaps Paramount would, when you think about some of the others, even with the spin of global networks. In other words, so it wouldn't be a part of it. So if you were a Comcast and you were coming, it's not like you'd be combining with anything that you've just spun off, by the way, in the form of Versant.