Media company Warner Bros. Discovery's (NASDAQ: WBD) stock dropped 11.7% in August, according to data provided by S&P Global Market Intelligence. The newly formed company gave a tepid earnings report, and investors aren't sure what to make of the company yet.

Warner Bros. was created in April when AT&T spun off WarnerMedia and merged it with Discovery in April. The idea was to create a more competitive media company in the wake of the burgeoning streaming industry. The company has a lot going for it, but before it can emerge as a strong player, it needs to smooth out the wrinkles of its formation. 

If it operated in the form in which it was created, most of those wrinkles would amount to absorbing restructuring charges. But CEO David Zaslav is making many changes, such as his initial slashing of the brand new CNN streaming service right after it launched. Warner Bros. Discovery is also balancing its licensing agreements, revamping its distribution strategy, and refocusing on business efficiency. So there's plenty of uncertainty while the company figures itself out, even though its media assets already make it a formidable contender in streaming and other networks.

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Source Fool.com