New York, January 21, 2026, 13:36 (EST) — Regular session
- Netflix shares dropped roughly 4.5% amid concerns over deal expenses and a halt to its buyback program
- The streamer surpassed holiday-quarter estimates and reported subscribers exceeding 325 million
- Traders are focused on the Paramount tender deadline and upcoming regulatory decisions
Netflix shares dropped roughly 4.5% to $83.38 by midday Wednesday, continuing their slide amid the company’s bid for Warner Bros. Discovery’s studio and streaming units. Shares of Warner Bros. rose about 1%, while Paramount Skydance edged down a bit.
Netflix shares fell after the company posted holiday-quarter revenue and earnings that topped Wall Street estimates Tuesday night. But its 2026 revenue forecast, ranging from $50.7 billion to $51.7 billion, came in slightly below expectations at the low end. Paid subscribers surpassed 325 million, and CFO Spencer Neumann said advertising revenue is expected to hit about $3 billion. Netflix also announced a pause on share buybacks as it accumulates cash for the Warner deal. Michael Ashley Schulman, CIO at Running Point Capital Advisors, noted the company often tolerates “near-term negative share price reaction” in pursuit of long-term growth. 1
On the earnings call, co-CEOs Ted Sarandos and Greg Peters pushed hard for a deal that could change Netflix’s strategy. “When we got into the hood … there were several things we saw that were just really exciting,” Peters said. Sarandos called the move “pro-consumer” and “pro-worker,” highlighting the company’s push to grow beyond its core streaming service. 2
Netflix’s slump stood out amid a wider rally on Wall Street following Tuesday’s sharpest drop in nearly three months. Shares bounced back after President Donald Trump indicated he wouldn’t resort to force in his bid to buy Greenland, removing a key source of investor unease. 3
Regulators are under the spotlight as EU antitrust officials prepare to assess Netflix’s and Paramount Skydance’s bids for Warner Bros. simultaneously, Bloomberg News reported. This rare simultaneous review could influence the bidding war by fast-tracking approval for one party or imposing conditions. Any deal will almost certainly face scrutiny not just in the EU, but also in the US and the UK. 4
Investors are now grappling with a more straightforward question: how much of Netflix’s margin gains will hold up after a cash-heavy acquisition and the halt in share buybacks. Netflix has enjoyed tighter content spending lately, but Warner’s assets bring a new cost structure and fresh expectations tied to theatrical releases and the HBO brand.
There is a clear downside risk. A prolonged regulatory review could weigh on the stock, and with the funding plan plus the buyback suspension in place, the cushion that once helped steady shares during weaker periods is gone.
The coming weeks might get complicated. A stronger counteroffer could push Netflix to revisit negotiations, while even a whisper of stricter regulatory action would hit the stock fast.
Traders are now focused on the ticking clock: Paramount Skydance’s tender offer ends Wednesday, and Warner Bros. expects to hold a special investor meeting to vote on the Netflix deal by April. Harris Oakmark portfolio manager Alex Fitch warned that “this new agreement only ramps up the pressure,” while eMarketer analyst Ross Benes noted, “unless Paramount raises its bid, the appeal will be window dressing.” 5
