Netflix Inc. investors were already skeptical about its $72 billion deal for Warner Bros. Discovery Inc. Now the threat of having to pay even more and potentially face a protracted regulatory fight is making matters worse.
Shares of Netflix closed down 3.4% on Monday, at the lowest since mid-April, after Paramount Skydance Corp. made a $108 billion hostile bid for the HBO owner and President Donald Trump said the Netflix deal “could be a problem.” The stock is down more than 20% since Oct. 21, when a disappointing third-quarter earnings report added to unease about its potential pursuit of Warner Bros.
“A higher bid by Paramount makes it more likely that either Netflix has to increase its price or walk away,” said Uday Cheruvu, portfolio manager at Harding Loevner, which owns Netflix shares. Even if Netflix prevails, the acquisition is risky because it involves integrating a whole new organization and “the problems that brings,” Cheruvu said.
After rallying early in 2025, Netflix shares have been under pressure in recent months amid concerns about its growth outlook and its costly pursuit of Warner Bros. The stock has plunged 28% since the end of June, making it the seventh-worst performer in the Nasdaq 100 Index in the second half of the year. What had been a 50% advance in the first six months of 2025 is now down to less than 8%.
