Paul Sakuma
Market cheer as Netflix walks away from Warner Bros. deal
Shares of Netflix climbed nearly 10% in after-hours trading, trading above $92, after the company declined to increase its offer for Warner Bros. Discovery. The streaming giant’s stock had closed at $84.59 on Thursday. Netflix’s co-CEOs, Ted Sarandos and Greg Peters, said the price required to match Paramount Skydance’s bid made the deal “no longer financially attractive.”
Why Netflix said no — and what investors liked
Netflix had negotiated a deal in December to buy Warner Bros. Discovery’s studio and streaming businesses for $27.75 per share. This week, Paramount sweetened its approach: Paramount Skydance raised its offer for all of Warner Bros. Discovery from $30 to $31 per share. Faced with that higher price, Netflix opted not to chase the bid.
- Netflix warned the move would take it into theatrical distribution and other businesses outside its core streaming model.
- Management framed the acquisition as a “nice to have” at the right price, not a “must have” at any cost.
- Investors had already been uneasy about Netflix’s plan, given the high price and the shift into unfamiliar territory. The stock had fallen sharply after the original announcement.
The assets on the table and the strategic stakes
Warner Bros. Discovery controls marquee IP and brands, including the DC Comics library, “Harry Potter” rights, and HBO — all valuable to any media buyer. Paramount’s higher offer covered the studio, streaming arms and the struggling cable business, prompting the board to call Paramount Skydance’s bid a “superior proposal.”
Netflix’s leadership said the transaction they had negotiated “would have created shareholder value with a clear path to regulatory approval,” but they declined to match the new price. “We’ve always been disciplined,” Sarandos and Peters added, “and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.”
What this means for NFLX stock and the media landscape
The immediate market reaction was positive for Netflix: the stock popped nearly 10% in after-hours trade. For the broader media world, the bidding battle for Warner Bros. Discovery highlighted how legacy studios and major franchises still hold huge strategic value. Paramount’s higher bid and the board’s declaration of a “superior proposal” reshaped the takeover fight, and Netflix chose to preserve capital rather than overpay.
Bottom line
Netflix’s decision to stand down from matching Paramount Skydance’s offer sparked a strong bounce in netflix stock as Wall Street rewarded the company’s discipline. Management called the opportunity attractive only at the right price. And investors cheered the choice to avoid an expensive detour into theatrical distribution and other non-core businesses.
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