Why Netflix Stock Fell Today
Key Points
Netflix is rumored to be pursuing an acquisition of Warner Bros Discovery.
The streaming giant may not achieve the market share gains it covets.
- 10 stocks we like better than Netflix ›
Shares of Netflix (NASDAQ: NFLX) declined nearly 5% on Wednesday, following reports of ongoing acquisition talks between the streaming leader and its rival, Warner Bros Discovery (NASDAQ: WBD).
Image source: Netflix.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Market share gains might not materialize
Netflix is interested in purchasing Warner Bros Discovery's studio assets and HBO Max streaming service, according to Reuters. A deal would allow Netflix to bundle HBO Max with its own streaming offerings -- at a lower overall cost for consumers. A combination would also bolster Netflix's content library with popular shows like Game of Thrones, Succession, and The Wire.
Yet investors are questioning whether the potential benefits are worth the sizable cash offer Netflix has reportedly made to acquire its smaller competitor. Reuters noted that most of HBO Max's subscribers are already Netflix customers, so a deal is not likely to produce significant market share gains for the entertainment titan.
A merger between the two streaming companies would also draw regulatory scrutiny. Netflix's focus on lowering costs for bundled subscribers might be geared toward pre-empting regulators' concerns.
A bidding war may be brewing
Yet the ballooning cost of an acquisition remains a major sticking point for investors. Reuters reported in October that Warner Bros Discovery rejected a $60 billion buyout bid from Paramount Skydance.
In recent days, Netflix, Paramount, and Comcast made larger offers to entice Warner Bros Discovery to sell, according to Reuters. That's sparking fears of a bidding war that could drive up the price of a potential purchase to nearly $70 billion, which would further dampen any potential gains for Netflix or its fellow suitors.
Should you invest $1,000 in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $589,717!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,111,405!*
Now, it’s worth noting Stock Advisor’s total average return is 1,018% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 1, 2025
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
Recommended Articles
