Los Angeles, 21 January 2026 — Netflix, Inc. has defended its all-cash bid to acquire Warner Bros. Discovery’s studio and streaming assets, following tepid quarterly results that spooked investors and sent its shares sharply lower.
The streaming giant reported modest beats on revenue and earnings for its usually strong holiday quarter, but the company’s guidance and earnings outlook disappointed Wall Street and raised concerns on investor confidence amid a costly acquisition strategy. Netflix’s shares fell nearly 6% in pre-market trading, reflecting investor wariness over the impact of the proposed purchase and the company’s future profitability.
Shift from Build to Buy Strategy
Netflix’s co-chief executives Ted Sarandos and Greg Peters spent much of their post-earnings call defending the company’s US$82.7 billion all-cash offer for Warner Bros’ studios, streaming platforms, content libraries and major franchises, including “Game of Thrones” and “Harry Potter” — marking a departure from Netflix’s long-held preference for building original content rather than acquiring external assets.
Sarandos pointed to intensifying competition from rivals such as Alphabet’s YouTube, Amazon’s MGM holdings and Apple’s content investments, saying the breadth and prestige of Warner Bros’ content would strengthen Netflix’s position across theatrical and streaming markets. “TV is not what we grew up on … so we all compete with them in every dimension, for talent, for ad dollars, for subscription dollars,” Sarandos said.
Investors Unconvinced and Financial Trade-offs
Despite Netflix’s enthusiasm, many investors remain unconvinced about the strategic timing and financial risk of the deal. The company has paused share buybacks and secured bridge financing commitments to help fund the purchase, but analysts warn that the scale and cost of the transaction present significant execution and regulatory risks.
Netflix reported it had incurred tens of millions of dollars in financing costs and adjusted its offer structure to support its all-cash bid, which continues to draw scrutiny amid a competitive bidding landscape that also includes rival offers from Paramount Skydance.
Market and Strategic Implications
The acquisition, if completed, would reshape the global media landscape by combining one of the largest streaming platforms with one of Hollywood’s most storied content producers. However, investors are watching closely to see whether the deal will gain regulatory approval, emerge from shareholder votes and ultimately deliver the strategic benefits Netflix has forecast against rising content and distribution costs.
Netflix’s leadership maintains that the Warner Bros assets complement its content offerings and support long-term growth, even as the company navigates near-term stock volatility and market skepticism.
