Netflix (NFLX) Stock Drops Pre-Market as Musk Targets Streaming Giant Over Kids' Content

TLDR

Table of Contents

Netflix stock fell 1.5% in premarket trading as backlash grew over remarks by a Netflix show creator about Charlie Kirk’s assassination
Elon Musk joined calls to cancel Netflix subscriptions, posting “Cancel Netflix for the health of your kids” and criticizing LGBTQ+ content in the show “Dead End: Paranormal Park”
Retail sentiment on Stocktwits turned bearish as the NFLX ticker trended in the top 10, with messages calling to “dump this woke trash”
Bernstein analyst Laurent Yoon said Netflix is reportedly considering acquiring Warner Bros. Discovery’s film studio and streaming assets, though he sees the move as unlikely
The analyst maintained an Outperform rating on NFLX with a $1,390 price target, representing 17% upside, while the stock is up 34.5% year-to-date

Netflix stock fell 1.5% in premarket trading on Wednesday. The drop came as controversy swirled around remarks made by a Netflix show creator.

Retail investors tracked the decline closely on Stocktwits. The NFLX ticker climbed into the platform’s top 10 trending equities. Sentiment shifted from neutral to bearish in a single day.

The controversy centers on Hamish Steele, creator of the animated series “Dead End: Paranormal Park.” An old social media post from Steele resurfaced following the assassination of conservative activist Charlie Kirk at a Utah college. In the post, Steele allegedly responded to UK Prime Minister Keir Starmer’s condolences by calling Kirk derogatory names.

Conservative circles raised concerns about the themes presented in content aimed at children. The controversy quickly gained traction on social media platforms.

Elon Musk entered the conversation on Wednesday. The billionaire posted “Cancel Netflix for the health of your kids.”
He reshared content depicting Netflix as a Trojan horse targeting children. In another post, Musk criticized the show for “pushing pro-transgender on children,” adding “This is not ok.”

Cancel Netflix for the health of your kids https://t.co/uPcGiURaCp
— Elon Musk (@elonmusk) October 1, 2025

General market negativity from the U.S. government shutdown also weighed on the stock. The combination of factors created headwinds for Netflix shares in early trading.

Acquisition Rumors Surface

While controversy dominated headlines, another story emerged about Netflix’s potential plans. The streaming giant is reportedly considering a bid to acquire Warner Bros. Discovery assets.

The deal would focus on WBD’s film studio and streaming properties rather than the entire company. This would give Netflix access to franchises like DC Studios, Harry Potter, and Looney Tunes. HBO Originals would also come into the fold.

Bernstein analyst Laurent Yoon called Netflix “interesting” as a potential buyer. But he labeled the deal as unlikely.

Yoon questioned what strategic value Netflix would gain from the purchase. He noted the industry has seen questionable deals before, citing AT&T/WarnerBros and Amazon/MGM as examples.

Analyst Perspective on Growth Limits

The analyst said a WBD acquisition might boost short-term engagement. But he doesn’t expect it to create sustained material growth.

Netflix users already average about 60 minutes per day on the platform. This suggests the service may be reaching a ceiling for general entertainment content. Simply adding more similar content won’t necessarily drive growth.

On the subscriber front, Yoon sees limited potential. Over 90% of HBO Max subscribers in the U.S. already use Netflix. The streaming giant already has strong penetration in developed markets.

Churn could improve with a stronger content lineup. However, Netflix already has best-in-class retention metrics. The upside appears constrained.

Some view the acquisition as a defensive move. A MediaCo+WBD combination could pose a long-term competitive threat. But Yoon believes any impact would unfold over several years.

Cost synergies exist in corporate functions and technology platforms. Yoon called these “no-brainer” efficiencies. But he views them as standard rather than decision drivers.

The analyst maintained an Outperform rating on NFLX shares. His price target sits at $1,390, representing 17% upside.

The Street’s average price target is slightly higher at $1,400.83. The consensus rating is Moderate Buy based on 25 Buys, 10 Holds, and 1 Sell.

Netflix shares are up 34.5% year-to-date as of the last close. The stock closed Tuesday’s session before the premarket decline on Wednesday.

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