New York Post·2026-01-30 15:04Core Viewpoint - Wall Street traders are increasingly optimistic about Warner Bros. Discovery (WBD) being sold to Netflix, with a significant reduction in short interest in the stock, indicating a shift in sentiment towards the company's future prospects [1][6]. Group 1: Short Interest Trends - WBD had experienced a rise in short interest throughout the year, making it one of the most heavily shorted entertainment stocks [2]. - Short interest has decreased from 6% in July to just 3% of the float, with traders covering approximately 30 million shares over the past month [7]. Group 2: Company Performance and Strategy - Under CEO David Zaslav's leadership, WBD has made significant improvements, including making HBO Max profitable, producing successful films, and reducing debt [5][6]. - The company's stock price has recovered from near penny stock levels to around $12, reflecting improved investor confidence [6]. Group 3: Regulatory Considerations - Despite the positive sentiment, there are concerns regarding the regulatory approval process for the potential sale to Netflix, which could take up to two years [8][10]. - Officials in the EU and UK are also expressing concerns about Netflix's market power, which could impact the deal's timeline and lead to a resurgence in short interest if delays occur [11].