Netflix Shares Tumble Following Announcement of Warner Bros. Acquisition Deal

Netflix Inc. experienced a significant drop in share value on December 5, 2025, as investors reacted to the company’s announcement of a strategic acquisition deal involving Warner Bros. Discovery’s core streaming business. The move marks Netflix’s largest expansion into owned content production and distribution since its inception, reshaping its long-term growth strategy. The transaction includes Warner Bros. Discovery's primary streaming platforms, including HBO Max and associated content libraries, valued at approximately $78 billion. This figure reflects a combination of cash and stock consideration, with Netflix issuing new shares equivalent to roughly 12% of its current market capitalization. The deal is expected to close by mid-2026, subject to regulatory approvals and shareholder consent. Market analysts noted that while the acquisition strengthens Netflix’s content portfolio—adding over 14,000 hours of premium programming—it also raises concerns about increased leverage and integration risks. The company’s debt load is projected to rise from $32 billion to $59 billion post-deal, significantly altering its financial profile. Additionally, investor sentiment was affected by the implied valuation multiple, which exceeds 25x forward EBITDA for the acquired streaming assets. The acquisition has broader implications across the media sector, potentially accelerating consolidation among streaming platforms. Competitors such as Disney and Amazon Prime Video may face intensified pressure to scale their own offerings. Content creators and talent agencies are also monitoring how ownership changes could influence licensing agreements and revenue allocation in the coming years.