DISCB Stock News Discovery Inc B Shares: What is going on with DISCB shares while A shares stable?


  • Discovery Communications is one of the companies caught up in the Archegos fund liquidation.
  • DISCB shares rocketed on Wednesday.
  • DISCA shares, the "normal ones," hardly budged.

Discovery was one of the stocks caught up in the recent Archegos liquidation rumours as Discovery (DISCA) shares dumped from near $78 to close last Friday at $41.90. 

Archegos is a hedge fund/family office that is reported to have taken large positions in certain TMT stocks (tech, media, telecom). Archegos is reported to have failed to meet a margin call from one of its investment bank account holders, and this resulted in a domino effect as multiple banks began liquidating positions across a number of related stocks. 


Stay up to speed with hot stocks' news!


DISCB stock news

IPO Edge broke the news last Friday that the sharp price moves in some TMT stocks, VIAC and Discovery (DISCA) in particular, were tied to Archegos Capital Management. Several investment banks warned of losses from an unnamed US client on Monday before the market opened. Credit Suisse and Nomura both made such statements on Monday and other investment banks were also under investor scrutiny to see if they were affected. 

The situation took a fresh twist on Wednesday as Discovery B shares rallied nearly 80%, moving from $75 to over $150 before closing up 83% at $128.

DISCA and DISCB are heavily correlated shares as the chart shows. But this DISCB spike happened once before back on May 1, 2020. DISCB shares spiked 68% on May 1, 2020, again for no apparent reason. Discovery issued a release after the huge move, saying it was unaware of the reasons, and DISCB shares quickly returned to normal levels.

DISCA versus DISCB

DISCB has a tiny free float (amount of shares available for trading). About 321k shares out of a free float of 6.51 million trade, according to data from Refinitiv. This makes it more volatile if interest and volume increases.

These are lightly traded shares held almost entirely by media tycoon John Malone, according to Factset. The B shares, DISCB, usually see volume around 3,000 shares per day. Volume on Wednesday was over 1.3 million shares.

DISCB shares have different voting rights compared to the more regular DISCA shares, with DISCB carrying ten votes per share as opposed to the DISCA shares carrying one vote.

DISCA stock price

Market participants were busy trying to find reasons for the move on Wednesday with various hypotheses (guesses!) being put forward. Talk of an arbitrage between the A and B shares gone wrong or retail traders driving the move were the main reasons given. The arb theory seems unlikely, given the tiny volume in the B shares, making any arb more difficult. Retail traders certainly were all over DISCB on social media with it being one of the top trending tickers across the usual stock social media sites. The move may also have been triggered by the recovery in DISCA shares on Tuesday when they closed up 5.5% and had been up nearer 10%. As the DISCB shares are correlated these also jumped on Tuesday by over 20%. This may have been flagged on several breakout systems and retail traders jumped in accordingly. The lack of liquidity then exaggerated the move.

Whatever the reason, traders should exercise extreme caution here. Discovery A shares have been trying to recover but are still merely back to where they were in January. The move in the B shares seems way overdone.

DISCA

At the time of writing, the author is long DISCA and VIAC shares. The author has no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor. 

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page. 

Errors and omissions excepted.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD languishes near multi-year low after RBA meeting minutes

AUD/USD languishes near multi-year low after RBA meeting minutes

AUD/USD remains depressed after the December RBA meeting minutes reiterated that upside inflation risks had diminished, which reaffirms bets for a rate cut in early 2025. This, along with concerns about China's fragile economic recovery and US-China trade war, undermines the Aussie and weighs on the currency pair.

AUD/USD News
USD/JPY sticks to positive bias after BoJ meeting minutes

USD/JPY sticks to positive bias after BoJ meeting minutes

USD/JPY holds steady above the 157.00 mark and moves little following the release of the October BoJ meeting minutes, emphasising a cautious approach to monetary policy amid domestic and global uncertainties. Adding to this, doubts over when the BoJ will hike interest rates again, which, along with a positive risk tone, undermines the safe-haven JPY.

USD/JPY News
Gold flat lines above $2,600 ahead of holiday trading week

Gold flat lines above $2,600 ahead of holiday trading week

Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday. 

Gold News
Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode

Solana dominates Bitcoin, Ethereum in price performance and trading volume: Glassnode

Solana is up 6% on Monday following a Glassnode report indicating that SOL has seen more capital increase than Bitcoin and Ethereum. Despite the large gains suggesting a relatively heated market, SOL could still stretch its growth before establishing a top for the cycle.

Read more
Bank of England stays on hold, but a dovish front is building

Bank of England stays on hold, but a dovish front is building

Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures