Netflix ended its bid to acquire Warner Bros. Discovery for $31 per share, choosing instead to invest $20 billion in content production this year. The move comes after Paramount Skydance offered a lower bid and the company was looking to conserve cash.
The decision is seen as a win for Netflix’s shareholders, who will receive a $2.8 billion deal breakup fee from Paramount. This means Netflix won’t have to take on additional debt of over $40 billion.
With the extra cash, Netflix plans to invest in content production and resume its stock buyback program, which was paused during the bidding war. The move is seen as a smart way to use spare cash and may be beneficial for shareholders who have seen the company’s stock decline by 43% from last summer’s peak.
While some investors might consider buying Netflix stock now, it’s worth noting that a rival analyst team identified 10 stocks with better potential returns than Netflix.
Source: https://www.nasdaq.com/articles/netflix-lost-netflix-won-film-11