Warner Bros. Discovery Stock Surges as Paramount’s $108 Billion Hostile Bid Challenges Netflix Deal

Warner Bros. Discovery, Inc. (NASDAQ: WBD) is suddenly less about box office and more about boardrooms. On Monday, December 8, 2025, the stock jumped sharply after Paramount Skydance lobbed a $30-per-share hostile all‑cash offer at the company, directly challenging Netflix’s already-announced acquisition of Warner Bros.’ studios and streaming assets. ^[1]

The result: WBD has turned into one of the most hotly contested takeover stories in modern media — and the stock price now reflects a tug-of-war between deal math, regulatory risk and still-imperfect fundamentals.

Where WBD Stock Stands Today

As of early afternoon on December 8, Warner Bros. Discovery shares were trading around $27.60, up roughly 5–7% on the day, after briefly pushing near the upper end of their intraday range around $28. ^[2]

• Day’s range: about $24.98–$27.96
• Volume: over 43 million shares changing hands — several times normal turnover
• 52‑week range: roughly $7.34–$28.64

From the 52‑week low near $7.34 to today’s levels, WBD is up roughly 275%, with most of that move driven not by sudden profit miracles, but by the prospect that someone — Netflix or now Paramount — will pay a big premium for the company. ^[3]

In other words, the equity is trading much more like an option on competing takeover outcomes than on Warner Bros. Discovery’s standalone earnings trajectory.

Paramount Skydance’s $30 All‑Cash Hostile Bid

Terms of the offer

On December 8, Paramount Skydance went fully hostile, announcing an all‑cash tender offer of $30 per WBD share for the entire company, including both studios/streaming and the cable networks. ^[4]

Key details from Paramount’s proposal:

• Offer price: $30 per share in cash
• Equity value: about $74.4 billion (for WBD’s shares)
• Implied enterprise value: roughly $108–109 billion once debt is included
• Premium: around 139% to WBD’s unaffected price of $12.54 before sale rumors surfaced in September
• Structure: hostile tender offer straight to shareholders, bypassing a board that has favored Netflix
• Timeline: tender reportedly set to expire in early January 2026, unless extended ^[5]

Paramount argues its bid is:

• Richer than Netflix’s by about $18 billion in total consideration
• Simpler, because it buys all of WBD — including the cable networks — in a single transaction
• More likely to clear antitrust review, since a combined Paramount+ / HBO Max would be a smaller streaming player than a Netflix / HBO Max combination. ^[6]

Paramount’s move is also designed to appeal to shareholders who dislike the idea of taking part of their consideration in Netflix stock and waiting 12–18 months for regulators to decide their fate.

Netflix’s $82.7 Billion Deal for Warner Bros.: What Was Agreed

Three days earlier, on December 5, Netflix and Warner Bros. Discovery announced a definitive agreement for Netflix to acquire Warner Bros.’ film and TV studios plus its streaming business (HBO / HBO Max / Max) after WBD completes a planned breakup into two companies. ^[7]

Under the Netflix deal:

• WBD will first split in two:
  • “Warner Bros.” – the Streaming & Studios company (film, TV, DC, HBO/HBO Max, games, etc.)
  • “Discovery Global” – the Global Networks business (cable channels like CNN, TBS, Discovery, etc.) ^[8]
• Netflix will then acquire the Warner Bros. streaming and studios business for:
  • $27.75 per WBD share in value (equity value about $72 billion, total enterprise value $82.7 billion) ^[9]
• According to disclosures and follow‑on coverage, WBD shareholders would receive approximately:
  • $23.25 in cash plus
  • $4.50 worth of Netflix stock per WBD share for the assets being sold ^[10]
• The companies currently expect closing in Q3 2026, subject to regulators in the U.S. and abroad. ^[11]

Netflix also agreed to a hefty breakup fee — about $5.8 billion if regulators block the transaction or Netflix walks away. ^[12]

So Paramount is essentially saying to shareholders: take a slightly higher price per share, all in cash, sooner, with what it claims is lower antitrust risk, instead of betting on a longer, more complicated Netflix tie‑up.

Antitrust Storm Clouds: Trump, Scholars and Unions Weigh In

Monday’s headlines weren’t just about Paramount’s bid. Markets also digested comments from President Trump, who said the Netflix–Warner combination’s market share “could be a problem” and signaled he expects to be personally involved in the regulatory decision. ^[13]

CoinCentral reported that his remarks — coming after a meeting with Netflix co‑CEO Ted Sarandos — knocked WBD about 1.7% in premarket trading and highlighted growing political focus on the deal. ^[14]

Beyond politics:

• Lawmakers from both parties have expressed concern about further consolidation in streaming, with Senator Elizabeth Warren calling the Netflix–WBD proposal an “anti‑monopoly nightmare.” ^[15]
• The Writers Guild of America and other Hollywood unions argue a Netflix–WBD merger would harm creative jobs, wages and content diversity. ^[16]

Antitrust scholars are already writing about it in detail.

A December 8 article on Truth on the Market estimates that, in a U.S. streaming‑only market, Netflix has about 20% of viewing hours, HBO Max around 15%, and other major services (Amazon, Disney+, Hulu, Paramount+, Peacock, Apple TV+) split the rest. A combined Netflix + HBO Max would control roughly 35% of streaming viewing time, above the 30% share that U.S. courts have historically treated as presumptively problematic for mergers under the Philadelphia National Bank standard. ^[17]

By contrast, a merged Paramount+ (7%) and HBO Max (15%) would sit closer to 22% of streaming hours — still big, but potentially easier to defend as a “challenger” to Netflix and Amazon rather than a new dominant giant. ^[18]

This regulatory asymmetry is central to Paramount Skydance’s pitch: its offer may deliver less antitrust friction and thus a quicker, more certain cash outcome for WBD shareholders.

Fundamentals Haven’t Disappeared: What Q2 and Q3 2025 Show

Even in takeover land, earnings still matter. Warner Bros. Discovery’s 2025 numbers show a company that is improving but still not fully healed.

Q2 2025: Streaming turns a corner

For the quarter ended June 30, 2025, WBD reported: ^[19]

• Total revenue: $9.8 billion, up about 1% year over year
• Adjusted EBITDA: $2.0 billion, up 9%
• Free cash flow: $702 million (held back by roughly $250 million of separation‑related costs)
• Streaming metrics:
  • Streaming revenue up 9% ex‑FX to $2.79 billion
  • Global streaming subscribers reached 125.7 million, up 3.4 million vs. Q1
  • Streaming segment Adjusted EBITDA of $293 million, versus a loss of $107 million a year earlier, as content and marketing spend were trimmed
• Leverage: Ended Q2 with $35.6 billion of gross debt and 3.3x net leverage, after $2.7 billion of debt reduction in the quarter

So by mid‑2025, the streaming business had flipped from money pit to profit contributor, even as traditional TV advertising stayed under pressure.

Q3 2025: Solid cash flow, but revenue still under strain

In Q3 2025 (quarter ended September 30), WBD’s headline numbers looked a bit softer on the top line but healthier on cash and leverage: ^[20]

• Revenue: $9.05 billion, down 6% year over year (flat to slightly up if you strip out one‑off 2024 Olympics revenue in Europe)
• Operating income: $611 million vs. $281 million a year prior
• Net loss: about $148 million, largely due to tax charges and interest expense
• Free cash flow: $701 million, up 11% year over year, even after roughly $500 million of separation‑related cash items
• Leverage: Gross debt trimmed to $34.5 billion, net leverage still around 3.3x
• Segment backdrop:
  • Global Linear Networks revenue down double digits as cord‑cutting continues
  • Streaming & Studios segment growing, helped by stronger box office and ongoing subscriber gains

AInvest’s quantitative note on WBD’s Q3 framed the story this way: the Streaming & Studios side looks increasingly attractive — with positive $1.3 billion of segment EBITDA and a growing IP pipeline — while legacy cable remains a drag, validating WBD’s decision to split the company in two. ^[21]

Seeking Alpha’s earnings analysis reached a similar conclusion: Q3 2025 results, adjusted for one‑offs, underscored why “buyers are circling” WBD. The piece emphasized: ^[22]

• Expanding free cash flow supports ongoing deleveraging
• Streaming and gaming deepen monetization of Warner’s IP (DC, Harry Potter, Game of Thrones, etc.)
• CEO David Zaslav is reportedly targeting a sale price closer to $40 per share, a level above both current bids but arguably consistent with the company’s strategic value if the assets are fully optimized under a stronger balance sheet

That $40 aspiration is part of why this bidding war might not be over.

How Analysts and Models See WBD Now

Street price targets vs. today’s deal‑driven price

According to StockAnalysis, as of December 8: ^[23]

• 18 Wall Street analysts covering WBD have a consensus “Buy” rating
• Their average 12‑month price target is $19.17
• The target range runs from $10 on the low end to $30 at the high end

With the stock currently around $27–28, that implies:

• WBD is trading well above the average target (roughly 30% downside vs. consensus)
• The market price is now close to the highest published target of $30, which happens to match Paramount’s bid

Recent rating moves highlight the split between fundamental valuation and M&A optionality: ^[24]

• Benchmark’s Matthew Harrigan maintained a Strong Buy and raised his target from $25 to $30 on December 8, explicitly acknowledging the takeover dynamics
• Barrington Research cut WBD from Buy to Hold on December 5, following the Netflix agreement, suggesting more limited upside from then‑current levels
• Wells Fargo’s Steven Cahall earlier lifted his target from $21 to $25 but kept an Equal Weight / Hold stance
• Rothschild & Co’s Hamilton Faber upgraded WBD from Hold to Strong Buy in late October with a $28 target, betting on improved streaming economics and sale optionality

So analysts, on average, had not priced in a bidding war when they last updated their models. The stock has now sprinted ahead of most fundamental targets thanks to Paramount’s hostile gambit.

Quant and technical signals: A “Strong Sell” with a twist

Algorithmic forecasting site Intellectia has turned sharply cautious on WBD despite the rally. Its December 8 update: ^[25]

• Labels WBD a “Strong Sell candidate” overall
• Projects:
  • 1‑day gain of about +0.14%
  • 1‑week move of roughly +3%
  • 1‑month decline of about ‑1.9%
• Much more dramatically, its model forecasts:
  • 2026 average price around $9.47, implying a ~64% drop from current levels
  • 2030 price near $9.70, suggesting little long‑term upside in a standalone scenario

The site notes that while moving averages are currently bullish (price above short‑, medium‑ and long‑term SMAs), overbought indicators like RSI above 80, high stochastic readings and elevated Williams %R all flash short‑term exhaustion, consistent with a stock that has run very far, very fast. ^[26]

It also highlights a short‑sale ratio around 11–12%, which has been falling as shorts cover into the spike — potentially amplifying volatility in both directions.

Fundamental valuation screens: Is WBD now overpriced?

Simply Wall St’s December valuation update takes a cold, spreadsheet‑driven view: ^[27]

• Using a discounted cash flow (DCF) model based on about $4.1 billion of free cash flow and moderate long‑term growth, they estimate intrinsic value around $20.08 per share
• With the market price above that level, they flag WBD as roughly 22% overvalued on fundamentals alone
• They also note:
  • A trailing P/E ratio near 124x, vastly above the entertainment industry’s ~21x average
  • A “fair” P/E multiple closer to 6–7x if you benchmark WBD’s growth and risk profile to peers

If you plug that same ~$4.1 billion of free cash flow into the current bids:

• Paramount’s ~$108.4 billion enterprise value implies an EV/FCF multiple around 26x
• Netflix’s ~$82.7 billion enterprise value implies roughly 20x EV/FCF

Those are rich but not unheard‑of multiples for scarce, global IP assets — which is exactly why strategic buyers are more aggressive than spreadsheets that assume WBD just keeps grinding away as an independent company. ^[28]

Key Risks Around WBD Stock from Here

Whether you’re bullish or skeptical, a few risk factors dominate the WBD story now:

1. Deal risk and outcome uncertainty

The obvious one:

• Paramount vs. Netflix is not just about price; it’s also about regulatory odds, timing and political optics.
• The WBD board has already endorsed Netflix once; Paramount is betting shareholders — and possibly regulators — will disagree and force a rethink. ^[29]

There are at least three broad scenarios:

1. Netflix deal closes: WBD shareholders end up with cash plus Netflix stock tied to the streaming assets, and Discovery Global trades separately.
2. Paramount wins: Shareholders take $30 cash, Paramount loads up on debt and aims to create a bigger competitor to Netflix and Disney.
3. Both deals fail: If regulators balk or financing wobbles, WBD could fall back toward pre‑rumor levels — potentially closer to the low‑to‑mid teens implied by many non‑deal valuation models.

The current share price bakes in a high probability that at least one premium transaction succeeds. If neither does, downside could be significant.

2. Regulatory and political risk

• A combined Netflix + HBO Max would almost certainly become the largest single streaming platform in the U.S. by viewing hours, likely above 30% market share, a level that triggers heightened antitrust scrutiny under long‑standing case law. ^[30]
• Trump’s explicit comments that the deal “could be a problem,” plus vocal opposition from senators and unions, raise the odds of a drawn‑out review, concessions, or even a blocked transaction. ^[31]

Paramount argues its own combination with WBD is structurally safer from an antitrust point of view, but regulators may still scrutinize the impact on content suppliers, theater chains and rival streamers.

3. Structural media headwinds

Regardless of who owns the company:

• Linear TV is in structural decline; Q2 and Q3 2025 both showed mid‑ to high‑single‑digit revenue drops in Global Linear Networks as cord‑cutting accelerates. ^[32]
• Streaming ARPU is under pressure, especially internationally, as WBD grows in lower‑priced markets and leans more on ad‑supported tiers. ^[33]
• The content arms race remains expensive, even if WBD has tightened costs; one bad slate of tentpoles or a prolonged advertising slump can quickly compress margins. ^[34]

4. Balance sheet and integration risk

WBD has done serious work reducing debt, but it still carries mid‑$30 billion of gross borrowings and a multi‑billion‑dollar content pipeline to fund. ^[35]

• Netflix would have to integrate a major studio and a complex global streaming platform while financing a huge cash outlay and managing its own debt.
• Paramount Skydance would be taking on even more leverage to win the bid, layering WBD’s obligations on top of its own. ^[36]

For shareholders, leverage magnifies both upside and downside: if synergies and growth materialize, the equity can do very well; if not, the capital structure can quickly become a constraint.

What It All Means for Investors Watching WBD

Right now, Warner Bros. Discovery stock is a referendum on deal probabilities, not on whether last quarter’s ad revenue was up or down a few percent.

• On pure fundamentals, most DCF and earnings‑based screens say the stock, at ~$27–28, is expensive, trading well above the average analyst target of $19.17 and above many fair‑value estimates in the high teens to low twenties. ^[37]
• Strategic buyers, however, are valuing WBD primarily as a unique collection of IP and a global streaming platform, and are willing to pay 20–26x current free cash flow to control it. ^[38]
• Short‑term technical indicators say the stock is overbought and vulnerable to swings as news hits, but also suggest shorts are retreating — a cocktail that can fuel violent moves in both directions. ^[39]

For traders, WBD is effectively a live‑action merger‑arbitrage drama, with headliners named Netflix, Paramount, Zaslav and Trump. For longer‑term investors, the question is more basic:

If all deals vanished tomorrow, would you be happy owning Warner Bros. Discovery at something like 20–25x normalized free cash flow, with a shrinking linear TV business and a now‑profitable but still competitive streaming arm?

There isn’t a single “right” answer; there are just different narratives, each with its own assumptions about regulation, streaming economics and the value of Hollywood’s intellectual property.

What’s clear is that on December 8, 2025, Warner Bros. Discovery’s share price is priced for drama. And in this particular franchise, the sequel — regulators, shareholder votes, and maybe new bidders — may matter more than the original.

References

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