New York, Jan 25, 2026, 05:55 EST — Market closed.
Shares of Netflix, Inc. (NFLX.O) climbed 3.1% on Friday, closing at $86.12 as the Warner deal grabbed fresh attention. The S&P 500 barely moved, while the Nasdaq edged up 0.28%. Reuters
Co-CEO Greg Peters dismissed Paramount Skydance’s competing bid for Warner Bros Discovery as something that “doesn’t pass the sniff test,” according to the Financial Times. Warner shareholders remain the target of both camps. Warner Bros Discovery shares ticked up 0.7% on Friday. Paramount’s hostile tender offer values the company at roughly $108 billion, while Netflix is offering $82.7 billion for Warner’s film, TV studios, and streaming assets. Reuters
As U.S. markets reopen Monday, Netflix shares are expected to react more to updates on deal financing and regulatory approvals than subscriber numbers. Investors are also eyeing this week’s Federal Reserve decision alongside a packed earnings slate—factors likely to jolt rate-sensitive growth stocks sharply. Reuters
On Jan. 20, Netflix and Warner announced they revised their deal into an all-cash offer of $27.75 per Warner share. Warner shareholders will also get Discovery Global shares once it separates. The companies said this streamlined setup aims for a shareholder vote by April 2026. They’ve filed for U.S. antitrust approval and still expect the deal to close 12 to 18 months after the original signing. Sarandos noted the updated cash terms should “provide greater financial certainty.” SEC
A regulatory filing revealed Netflix raised its senior unsecured bridge commitments — short-term loans intended to be refinanced later — to $42.2 billion from $34.0 billion. The document also detailed breakup fees: Warner would owe Netflix $2.8 billion under certain conditions, while Netflix would pay Warner $5.8 billion if a final order blocks the deal due to antitrust or foreign regulatory issues. Either side can walk away if the merger isn’t closed by March 4, 2027, with only limited automatic extensions allowed. SEC
Netflix reported in its Jan. 20 shareholder letter that fourth-quarter revenue jumped 18% to $12.05 billion, while operating income surged 30% to $3.0 billion. Paid memberships topped 325 million. The company projects 2026 revenue between $50.7 billion and $51.7 billion, aiming for an operating margin of 31.5%. It expects ad revenue to roughly double after surpassing $1.5 billion in 2025. At year-end 2025, Netflix held $9.0 billion in cash against $14.5 billion in gross debt, generated $9.5 billion in free cash flow, and bought back 18.9 million shares for $2.1 billion, leaving roughly $8.0 billion available under its buyback authorization. SEC
Management keeps circling back to that cash engine—it’s a key reason Netflix wants price certainty. But there’s a messier side: a deal this big can be a distraction and brings new costs that won’t appear in subscriber numbers.
Following the earnings report, Peters and Sarandos doubled down on their strategy, claiming competition from YouTube and Amazon has transformed the market, boosting Warner’s value. Peters described HBO as “an amazing brand” that would bring “prestige TV” to Netflix’s lineup. Reuters
Investors face a binary scenario: either approval and smooth integration, or drawn-out delays and a bigger price tag. Paramount might increase its bid, while regulators could drag their feet even if they eventually give the green light. Plus, a tighter credit market complicates matters for a buyer needing tens of billions in loans.
Macro factors could overshadow the narrative. The Federal Reserve is scheduled to meet Jan. 27-28, with its policy statement set for 2 p.m. on Jan. 28, followed by a press conference at 2:30 p.m., per the Fed’s official calendar. Federal Reserve
Paramount Skydance’s tender offer for Warner Bros. faces a crucial deadline on Feb. 20, following an extension. So far, only 6.8% of Warner shares had been tendered by the previous cutoff, according to Reuters. Any updated bid or change in tendered shares could influence NFLX ahead of the opening bell. Reuters
