Netflix Considers All-Cash Bid Amid Intensifying Warner Bros. Discovery Battle

The competitive landscape for media assets is heating up, with Netflix at the center of a fierce bidding war for key divisions of Warner Bros. Discovery. According to fresh reports, the streaming giant is contemplating a significant strategic pivot in its multi-billion dollar offer, potentially shifting to an entirely cash-based proposal. This move is seen as a direct response to the recent depreciation in its own share price and mounting competitive pressure from Paramount Skydance.

Market intelligence indicates Netflix is evaluating the feasibility of financing its entire proposed acquisition of Warner Bros. Discovery's studio and streaming units with cash. The deal is valued at approximately $83 billion. This potential restructuring aims to address a core weakness in the initial proposal: its dependence on Netflix's fluctuating stock valuation.

The original bid structure combined a cash component of $23.25 with a stock component of $4.50 in Netflix shares for each Warner Bros. Discovery share. However, Netflix's equity has declined by about 25% since October 2025, effectively reducing the total value offered to sellers. A pure cash transaction would insulate the deal's value from Netflix's stock performance and provide greater certainty for Warner Bros. Discovery's board.

Paramount Skydance Escalates Hostilities

Mounting pressure on Netflix stems largely from aggressive maneuvers by rival bidder Paramount Skydance, which has financial backing from David and Larry Ellison. The competition took a legal turn recently when Paramount filed a lawsuit against Warner Bros. Discovery. The action seeks to compel the disclosure of detailed financial data related to the Netflix agreement.

Paramount is highlighting its own competing, fully cash-financed offer of $30 per share. This proposal values Warner Bros. Discovery at nearly $108.7 billion, substantially above the current Netflix package. In a parallel tactic, Paramount has initiated a proxy fight, attempting to install its own nominees to the Warner Bros. Discovery board. These combined efforts are increasing pressure on the directors, who have previously shown a preference for the Netflix arrangement.

Market Analysts Recalibrate Expectations

The dual impact of Netflix's stock correction and acquisition uncertainty is now reflected in revised analyst assessments. TD Cowen adjusted its price target for Netflix shares downward from $142 to $115, while maintaining a "Buy" rating. The firm cited the company's intact long-term growth trajectory but acknowledged that near-term sentiment is being weighed down by transaction risks.

Should investors sell immediately? Or is it worth buying Netflix?

HSBC initiated coverage with a "Buy" recommendation and a $107 price target, viewing the current valuation level as an entry opportunity. A series of other adjustments from leading firms illustrate a wide spectrum of market expectations:

• Loop Capital: Reduced target price to $132.50
• Goldman Sachs: Lowered target to $112 (Neutral rating)
• HSBC: New coverage with a $107 target (Buy rating)

This range of targets underscores the divergent views on how the planned mega-acquisition and recent stock volatility will impact Netflix's future.

Key Financial Data and Context

• Current Share Price: Approximately $90.32 (last closing price)
• Recent Performance: Up 1.02% on a daily basis, but down roughly 19% since the stock split on November 17
• Market Capitalization: About $409 billion
• Competing Bid: Paramount's all-cash offer stands at $30 per share
• Next Major Event: Q4 2025 earnings scheduled for January 20, 2026

Fourth-Quarter Earnings in the Spotlight

Attention is now turning to Netflix's upcoming quarterly report on January 20. Operational expectations are high, with analysts forecasting the addition of 14.2 million new paying subscribers for the period. Major content releases, including the fifth season of "Stranger Things," along with live broadcasts of NFL games, are expected to provide significant tailwinds.

From a technical analysis perspective, the stock appears weaker. It is currently trading below both its 50-day and 200-day moving averages, signaling a burdened trend. While the 10-for-1 stock split executed in November 2025 improved liquidity, the share price has lacked momentum since reaching its split-adjusted 52-week high of $134.12.

High Stakes for Corporate Strategy

The potential switch to an all-cash offer highlights Netflix's determination to secure the Warner Bros. Discovery assets, even in the face of rising financing costs. With bridge financing already secured and a legally and financially aggressive rival in the picture, Netflix's acquisition strategy is taking center stage. For shareholders, this translates into a period of elevated volatility. New details regarding the deal's terms and the Q4 results on January 20 will serve as critical catalysts for the stock's near-term direction.