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

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

[NFLX After-hours Stock Price Performance, Source: Google Finance]

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

Previously, market concerns regarding expanded capital expenditure, rising leverage, and uncertainty over M&A synergies intensified as Netflix participated in the bidding for Warner Bros. assets, causing the stock price to plummet in a short period with cumulative losses once nearly halving. Against the backdrop of Paramount's continuous bidding increases and the simultaneous rise in transaction consideration and risk premiums, Netflix's decision to cut its losses and exit 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 uncertainty has temporarily cleared, allowing investor focus to return to its core subscriber growth and free cash flow return capabilities; meanwhile, Paramount has emerged as the provisional winner of this bidding war, though it still faces critical tests ahead such as regulatory review and integration execution.