Netflix Acquires Warner Bros. Discovery Amidst Investor Skepticism
Netflix (NASDAQ: NFLX) has announced its acquisition of Warner Bros. Discovery (NASDAQ: WBD) on December 5, resulting in a 20% decline in Netflix’s stock value since the announcement, including a 5% drop post-earnings report. Netflix’s cash offer is approximately $72 billion, which includes taking on $10.7 billion in net debt, representing nearly six times its current net income.
Despite WBD’s attractive content library, concerns stem from its previous business struggles, including a significant debt burden following AT&T‘s acquisition of Time Warner. Netflix’s growth has slowed recently, with only a 2% increase in hours watched in the last year, leading to questions about the motivations behind the acquisition amid a competitive entertainment landscape.
