Netflix loses the war for Warner Bros., Wall Street sees a win
Netflix opened sharply higher Friday, after it withdrew from the takeover battle for Warner Bros. Discovery, ceding the ground to Paramount Skydance.
You don’t have to be much of a market sleuth to see that Wall Street never liked the idea of Netflix scooping up the assemblage of media and movie properties for a whooping $83 billion price tag.
The stock slumped both on the day Netflix submitted a bid and the day it entered into an acquisition agreement with Warner Bros.
Now, on the back of Netflix declining to raise its bid and dropping out of the race to acquire Warner Bros., the streaming platform’s shares are having their best day since the market’s bounce back from the April tariff tantrum.
Driving the gains are what HSBC analysts call its “graceful exit” from the WBD brouhaha:
“A positive turn of events in our view, as we believe NFLX’s withdrawal from the race will leave it free to refocus on its business, while its closest competitors grapple with long and distracting regulatory approval and merger integration processes, and with Paramount Skydance saddled with sizable deal debts. And one must not forget the $2.8 bllion breakup fee (around 20% of NFLX 2026 estimated EPS) that NFLX will now be owed from WBD for choosing to go with another suitor.”
You don’t have to be much of a market sleuth to see that Wall Street never liked the idea of Netflix scooping up the assemblage of media and movie properties for a whooping $83 billion price tag.
The stock slumped both on the day Netflix submitted a bid and the day it entered into an acquisition agreement with Warner Bros.
Now, on the back of Netflix declining to raise its bid and dropping out of the race to acquire Warner Bros., the streaming platform’s shares are having their best day since the market’s bounce back from the April tariff tantrum.
Driving the gains are what HSBC analysts call its “graceful exit” from the WBD brouhaha:
“A positive turn of events in our view, as we believe NFLX’s withdrawal from the race will leave it free to refocus on its business, while its closest competitors grapple with long and distracting regulatory approval and merger integration processes, and with Paramount Skydance saddled with sizable deal debts. And one must not forget the $2.8 bllion breakup fee (around 20% of NFLX 2026 estimated EPS) that NFLX will now be owed from WBD for choosing to go with another suitor.”
