Warner Bros. Discovery Receives Amended Acquisition Offer from Paramount
"Now Streaming" is The Fly's weekly recap of the stories surrounding the biggest content streamers.PLAYING THIS WEEKEND:Netflixsubscribers this weekend can catch the next three episodes of Season 5 of "Strangers Things." The streaming giant dropped the next episodes in the show's final season on Christmas Day, with the final one expected on New Year's Eve. The science fiction saga debuted on Netflix in 2016 and has since become one of the biggest shows for the streaming platform.AMENDED OFFER:Warner Bros. Discoveryconfirmed that it has received an amended, unsolicited tender offer from Paramount Skydanceto acquire all of the outstanding shares of Warner Bros. Discovery common stock. The Warner Bros. Discovery Board of Directors, consistent with its fiduciary duties and in consultation with its independent financial and legal advisors, will carefully review and consider Paramount Skydance's offer in accordance with the terms of Warner Bros. Discovery's agreement with Netflix.Paramount Skydance's Amended Tender Offer follows the WBD Board of Directors' unanimous rejection of Paramount Skydance's previous unsolicited tender offer received on December 8, 2025. The WBD Board carefully reviewed the December 8 Tender Offer and determined that it provided inadequate value and imposed numerous significant risks and costs on WBD and its stockholders, and did not meet the criteria of a "Superior Proposal" under the Netflix Merger Agreement. The Board is not modifying its recommendation with respect to the Netflix Merger Agreement. Warner Bros. Discovery will review the Amended Tender Offer and advise its stockholders of the Board's recommendation after the completion of that review.MINI-TENDER OFFER:Netflix said it has been notified of an "unsolicited" mini-tender offer by TRC Capital Investment to purchase up to 1.25M shares of Netflix common stock at a price of $91.00 per share in cash. The offer is for less than 0.03% of the shares of Netflix common stock outstanding. Netflix recommends that shareholders reject TRC's unsolicited offer. "TRC's offer price is below the current market price for shares of Netflix common stock. The offer also is subject to numerous conditions. Netflix is not affiliated or associated in any way with TRC, its mini-tender offer or the offer documentation. Mini-tender offers are designed to seek less than 5 percent of a company's outstanding shares, thereby avoiding many investor protections applicable to larger tender offers under U.S. securities laws," the company said in a statement. Netflix "urges investors to obtain current market quotations for their shares, consult with their broker or financial advisor and exercise caution with respect to TRC's offer."PODCAST STREAMING:In October, YouTube TVviewers streamed over 700M hours of podcasts on their living room devices, nearly doubling the amount of time in the same period last year, Ashley Carman of Bloomberg. "The living room just continues to be this amazing bright spot in terms of consumption," said Steve McLendon, head of product for podcasts at YouTube, in an interview. "We knew video would be big for podcasting but it continues to surprise us how big it is."STOCK PLAYS:Other publicly traded companies in the space include Disney, Apple, FuboTV, Comcast, Fox, and AMC Networks.
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Netflix Reports Strong Q3 Earnings Amid Stock Volatility
- Strong Financial Performance: Netflix's Q4 revenue rose 17.6% year-over-year to $12.1 billion, with earnings per share climbing 30.2% to $0.56, demonstrating the company's robust performance in the streaming market and its ability to attract over 325 million paid subscribers.
- Stock Split Impact: The announcement of a 10-for-1 stock split provided a temporary boost, yet concerns over the proposed acquisition of Warner Bros. have led to a 27% decline in stock price over the past six months, reflecting market uncertainty about future prospects.
- Acquisition Potential: Netflix's plan to acquire Warner Bros. for $82.7 billion, while increasing debt, could unlock significant value by leveraging Warner's extensive content library alongside Netflix's data-driven content creation capabilities, presenting substantial growth opportunities.
- Market Competition and Opportunities: Despite fierce competition, Netflix remains a leader in the streaming sector, with management noting that it commands less than 10% of TV viewing time in its most advanced markets, indicating ample room for growth, making the current stock dip an attractive buying opportunity.
Netflix Reports Strong Earnings but Stock Drops
- Strong Earnings Report: Netflix's Q4 revenue exceeded $12 billion, marking an 18% year-over-year increase, with earnings per share at $0.56, slightly above Wall Street expectations, indicating stable performance in a mature market.
- Slower Growth Forecast: Management projects revenue growth for 2026 to be between 12-14%, down from 16% in 2025, raising investor concerns about future growth and causing the stock to drop approximately 5% post-earnings.
- Increased Content Investment: Netflix plans to boost content spending by 10% to $18 billion in 2026 to enhance its content library and maintain market competitiveness, although this will increase the company's debt burden.
- Acquisition Strategy Shift: Netflix amended its bid for Warner Bros. Discovery to an all-cash offer valued at approximately $72 billion, aiming to secure a vast content library, but this will raise its debt from $34 billion to $42 billion.
