Trump Threatens Netflix Over Susan Rice's Position
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NFLX?
Source: stocktwits
- Trump's Threat to Netflix: Trump warned Netflix on social media to fire board member Susan Rice immediately or face consequences, a statement that could negatively impact Netflix's stock price, particularly amid its acquisition negotiations with Warner Bros.
- Complicated Acquisition Talks: Netflix is in acquisition talks with Warner Bros. but faces competition from Paramount, which has agreed to re-engage to hear the latest offers, increasing pressure on Netflix during the acquisition process.
- Market Reaction Anticipated: Due to Trump's threats, Netflix's shares may open lower in the new trading week, especially as its stock has already declined over 17% year-to-date, undermining market confidence in its Warner Bros. acquisition.
- Significant Political Influence: Rice, who joined Netflix's board in 2018, sparked Trump's strong reaction, highlighting the influence of political factors on corporate decisions, which may affect Netflix's future strategic direction and market performance.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
10 Hold
1 Sell
Moderate Buy
Current: 77.000
Low
92.00
Averages
114.18
High
150.00
Current: 77.000
Low
92.00
Averages
114.18
High
150.00
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Netflix Stock Underperforms Post-Split Amid Acquisition Concerns
- Stock Split Impact: Historically, stocks that split have outperformed the S&P 500 by nearly 14 percentage points in the year following the announcement; however, Netflix's shares have dropped 28% since its 10-for-1 split announcement, indicating market unease about its future prospects.
- Analyst Perspectives: Despite Netflix's current price of $79 per share, virtually all Wall Street analysts believe it is undervalued, with target prices ranging from $79 to $150, the latter suggesting a 90% upside, reflecting divergent views on its intrinsic value.
- Acquisition Risks and Opportunities: Netflix's all-cash bid of $27.75 per share for Warner Bros. Discovery totals approximately $72 billion, and while it would inherit nearly $11 billion in debt, the acquisition could secure major franchises like the DC Universe, potentially driving business growth for decades.
- Earnings Expectations: Morgan Stanley analyst estimates Netflix's earnings per share could reach $6.50 by 2030, implying a 21% annual growth rate, while the consensus forecast suggests a 22% growth over the next three years, making the current P/E ratio of 31 appear reasonable, indicating that the market may be overly pessimistic about Netflix.
See More
Netflix's Warner Bros. Acquisition: Risks and Opportunities
- Stock Underperformance: Since announcing a 10-for-1 stock split last October, Netflix shares have dropped 28%, while the S&P 500 has only risen about 1%, indicating market concerns about its future growth, particularly regarding its $83 billion bid for Warner Bros.
- Analyst Optimism: Despite the stock decline, nearly all Wall Street analysts believe Netflix's current price of $79 is undervalued, with a highest target price of $150 suggesting a potential upside of 90%, reflecting confidence in its future earnings potential.
- Strong Financial Performance: Netflix reported an 18% increase in fourth-quarter sales to $12 billion, with net income rising 30% to $0.59 per share, driven by membership growth and advertising revenue, despite the debt risks associated with the acquisition.
- Potential Acquisition Benefits: If the Warner Bros. acquisition succeeds, Netflix would gain rights to major franchises like the DC Universe and Game of Thrones, providing a wealth of intellectual property that could significantly accelerate its business growth for decades to come.
See More
Trump Threatens Netflix Over Susan Rice's Position
- Trump's Threat to Netflix: Trump warned Netflix on social media to fire board member Susan Rice immediately or face consequences, a statement that could negatively impact Netflix's stock price, particularly amid its acquisition negotiations with Warner Bros.
- Complicated Acquisition Talks: Netflix is in acquisition talks with Warner Bros. but faces competition from Paramount, which has agreed to re-engage to hear the latest offers, increasing pressure on Netflix during the acquisition process.
- Market Reaction Anticipated: Due to Trump's threats, Netflix's shares may open lower in the new trading week, especially as its stock has already declined over 17% year-to-date, undermining market confidence in its Warner Bros. acquisition.
- Significant Political Influence: Rice, who joined Netflix's board in 2018, sparked Trump's strong reaction, highlighting the influence of political factors on corporate decisions, which may affect Netflix's future strategic direction and market performance.
See More
Trump Pressures Netflix to Fire Board Member Susan Rice
- Political Pressure Intensifies: Trump has publicly called for Netflix to fire board member Susan Rice, labeling her a 'political hack' and warning of consequences if his demands are not met, which could adversely affect Netflix's corporate governance and public perception.
- Acquisition Under Review: The DOJ is currently reviewing Netflix's proposed $72 billion acquisition of Warner Bros. Discovery, with Trump stating he will not interfere in the process, yet this scrutiny may impact Netflix's competitive positioning and future expansion plans.
- Competition Impact Investigation: The DOJ is also investigating whether Netflix's acquisition could harm competition, particularly examining if the company employs anti-competitive tactics in negotiations with independent content creators, which could lead to stricter regulatory oversight for Netflix in the industry.
- Market Response Uncertain: Rice indicated in a podcast that corporations will face accountability if Democrats regain power, suggesting that Netflix may need to adjust its policies and market strategies in response to potential political and market risks in the future.
See More
Trump Demands Netflix Fire Board Member Susan Rice
- Trump's Threat: Trump demanded Netflix fire board member Susan Rice, labeling her a 'political hack' and warning of consequences, indicating his strong interference intentions in corporate governance.
- Rice's Warning: In a podcast, Rice stated that corporations yielding to Trump would face negative repercussions, suggesting that Democrats would hold these companies accountable if they regain power, reflecting the potential impact of political dynamics on corporate decisions.
- Acquisition Review: Trump's comments coincide with the DOJ's review of Netflix's proposed $72 billion acquisition of Warner Bros. Discovery, which could affect Netflix's competitive position, notably excluding cable networks like CNN from the deal.
- Competition Investigation: The DOJ is also investigating whether Netflix's acquisition could harm competition and examining its negotiations with independent content creators for anti-competitive practices, which could significantly impact Netflix's future expansion and innovation capabilities.
See More
Trump Urges Netflix to Fire Susan Rice Amid Acquisition Tensions
- Political Pressure Intensifies: Trump publicly urged Netflix to fire former national security adviser Susan Rice, labeling her a 'political hack,' which escalates the political tensions surrounding Netflix's pursuit of a major acquisition of Warner Bros. entertainment assets.
- Acquisition Review: Netflix is pursuing a $72 billion deal to acquire Warner's film and television studios along with the HBO Max streaming service, a transaction currently under scrutiny by the Justice Department, which could impact Netflix's market position.
- Increased Competition: Concurrently, Paramount has launched a $77.9 billion hostile bid for Warner, including its cable networks like CNN and TNT, intensifying competitive pressures on Netflix as it navigates its acquisition strategy.
- Rice's Background: Susan Rice, who has served as U.S. ambassador to the UN and national security adviser under Obama, has had a tumultuous tenure on Netflix's board since joining in 2018, with her political affiliations sparking significant backlash from Trump and his supporters.
See More
Netflix Stock Underperforms Post-Split Amid Acquisition Concerns
- Stock Split Impact: Historically, stocks that split have outperformed the S&P 500 by nearly 14 percentage points in the year following the announcement; however, Netflix's shares have dropped 28% since its 10-for-1 split announcement, indicating market unease about its future prospects.
- Analyst Perspectives: Despite Netflix's current price of $79 per share, virtually all Wall Street analysts believe it is undervalued, with target prices ranging from $79 to $150, the latter suggesting a 90% upside, reflecting divergent views on its intrinsic value.
- Acquisition Risks and Opportunities: Netflix's all-cash bid of $27.75 per share for Warner Bros. Discovery totals approximately $72 billion, and while it would inherit nearly $11 billion in debt, the acquisition could secure major franchises like the DC Universe, potentially driving business growth for decades.
- Earnings Expectations: Morgan Stanley analyst estimates Netflix's earnings per share could reach $6.50 by 2030, implying a 21% annual growth rate, while the consensus forecast suggests a 22% growth over the next three years, making the current P/E ratio of 31 appear reasonable, indicating that the market may be overly pessimistic about Netflix.
See More
Netflix's Warner Bros. Acquisition: Risks and Opportunities
- Stock Underperformance: Since announcing a 10-for-1 stock split last October, Netflix shares have dropped 28%, while the S&P 500 has only risen about 1%, indicating market concerns about its future growth, particularly regarding its $83 billion bid for Warner Bros.
- Analyst Optimism: Despite the stock decline, nearly all Wall Street analysts believe Netflix's current price of $79 is undervalued, with a highest target price of $150 suggesting a potential upside of 90%, reflecting confidence in its future earnings potential.
- Strong Financial Performance: Netflix reported an 18% increase in fourth-quarter sales to $12 billion, with net income rising 30% to $0.59 per share, driven by membership growth and advertising revenue, despite the debt risks associated with the acquisition.
- Potential Acquisition Benefits: If the Warner Bros. acquisition succeeds, Netflix would gain rights to major franchises like the DC Universe and Game of Thrones, providing a wealth of intellectual property that could significantly accelerate its business growth for decades to come.
See More
Trump Threatens Netflix Over Susan Rice's Position
- Trump's Threat to Netflix: Trump warned Netflix on social media to fire board member Susan Rice immediately or face consequences, a statement that could negatively impact Netflix's stock price, particularly amid its acquisition negotiations with Warner Bros.
- Complicated Acquisition Talks: Netflix is in acquisition talks with Warner Bros. but faces competition from Paramount, which has agreed to re-engage to hear the latest offers, increasing pressure on Netflix during the acquisition process.
- Market Reaction Anticipated: Due to Trump's threats, Netflix's shares may open lower in the new trading week, especially as its stock has already declined over 17% year-to-date, undermining market confidence in its Warner Bros. acquisition.
- Significant Political Influence: Rice, who joined Netflix's board in 2018, sparked Trump's strong reaction, highlighting the influence of political factors on corporate decisions, which may affect Netflix's future strategic direction and market performance.
See More
Trump Pressures Netflix to Fire Board Member Susan Rice
- Political Pressure Intensifies: Trump has publicly called for Netflix to fire board member Susan Rice, labeling her a 'political hack' and warning of consequences if his demands are not met, which could adversely affect Netflix's corporate governance and public perception.
- Acquisition Under Review: The DOJ is currently reviewing Netflix's proposed $72 billion acquisition of Warner Bros. Discovery, with Trump stating he will not interfere in the process, yet this scrutiny may impact Netflix's competitive positioning and future expansion plans.
- Competition Impact Investigation: The DOJ is also investigating whether Netflix's acquisition could harm competition, particularly examining if the company employs anti-competitive tactics in negotiations with independent content creators, which could lead to stricter regulatory oversight for Netflix in the industry.
- Market Response Uncertain: Rice indicated in a podcast that corporations will face accountability if Democrats regain power, suggesting that Netflix may need to adjust its policies and market strategies in response to potential political and market risks in the future.
See More
Trump Demands Netflix Fire Board Member Susan Rice
- Trump's Threat: Trump demanded Netflix fire board member Susan Rice, labeling her a 'political hack' and warning of consequences, indicating his strong interference intentions in corporate governance.
- Rice's Warning: In a podcast, Rice stated that corporations yielding to Trump would face negative repercussions, suggesting that Democrats would hold these companies accountable if they regain power, reflecting the potential impact of political dynamics on corporate decisions.
- Acquisition Review: Trump's comments coincide with the DOJ's review of Netflix's proposed $72 billion acquisition of Warner Bros. Discovery, which could affect Netflix's competitive position, notably excluding cable networks like CNN from the deal.
- Competition Investigation: The DOJ is also investigating whether Netflix's acquisition could harm competition and examining its negotiations with independent content creators for anti-competitive practices, which could significantly impact Netflix's future expansion and innovation capabilities.
See More
Trump Urges Netflix to Fire Susan Rice Amid Acquisition Tensions
- Political Pressure Intensifies: Trump publicly urged Netflix to fire former national security adviser Susan Rice, labeling her a 'political hack,' which escalates the political tensions surrounding Netflix's pursuit of a major acquisition of Warner Bros. entertainment assets.
- Acquisition Review: Netflix is pursuing a $72 billion deal to acquire Warner's film and television studios along with the HBO Max streaming service, a transaction currently under scrutiny by the Justice Department, which could impact Netflix's market position.
- Increased Competition: Concurrently, Paramount has launched a $77.9 billion hostile bid for Warner, including its cable networks like CNN and TNT, intensifying competitive pressures on Netflix as it navigates its acquisition strategy.
- Rice's Background: Susan Rice, who has served as U.S. ambassador to the UN and national security adviser under Obama, has had a tumultuous tenure on Netflix's board since joining in 2018, with her political affiliations sparking significant backlash from Trump and his supporters.
See More
