Netflix Abandons Warner Bros. Bid, Focuses on Buybacks to Boost Confidence, Paramount Becomes Final Winner

TradingKey – Netflix (NFLX) has officially withdrawn from the bidding war for Warner Bros. Discovery (WBD), stating that the current offer "is no longer financially attractive" and announcing the resumption of its share buyback program to return value to shareholders.

[NFLX after-hours stock price trend, Source: Google Finance]

Boosted by this news, Netflix's after-hours share price surged as much as 10%; the potential buyer Paramount Global (PSKY) rose more than 5%, while Warner Bros. shares fell nearly 3%.

Previously, Netflix's involvement in the bidding for Warner Bros. assets triggered significant market concerns over expanded capital expenditure, rising leverage, and M&A synergy uncertainties, causing its stock price to plummet in a short period with cumulative losses once nearing 50%. Against the backdrop of Paramount's continuous counter-offers and the simultaneous rise in transaction consideration and risk premiums, Netflix's decision to cut losses and withdraw was interpreted by the market as a renewed emphasis on financial discipline.

From the perspective of capital market reactions, Netflix's withdrawal signifies that M&A uncertainties have temporarily cleared, allowing investor focus to return to its core subscriber growth and free cash flow generation; Paramount has emerged as the interim winner of this bidding war, though it still faces critical tests such as regulatory scrutiny and integration execution.