Netflix (NFLX) Stock Jumps 10% After Stepping Back from Warner Bros. Discovery Deal

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Netflix walked away from Warner Bros. Discovery after WBD’s board declared Paramount Skydance’s improved $31-per-share all-cash bid superior to Netflix’s proposal.
Paramount’s enhanced offer rose from $30 to $31 per share, covering WBD’s full asset portfolio including HBO, CNN, and legacy cable channels.
Netflix declined to submit a counteroffer, declaring the deal “no longer financially attractive” at the elevated price point.
Under the Paramount arrangement, Netflix will receive its $2.8 billion breakup fee from WBD, while Paramount faces a $7 billion penalty should the deal fall through.
Netflix stock jumped around 10% in after-hours trading; WBD fell roughly 2%, while Paramount gained approximately 5%.

Netflix ($NFLX) stock witnessed a dramatic rally in Thursday’s extended trading session after the streaming leader withdrew from its bid to acquire Warner Bros. Discovery assets, clearing the path for Paramount Skydance to pursue a deal valued at roughly $111 billion.

Netflix, Inc., NFLX

The Warner Bros. Discovery board concluded that Paramount’s revised $31-per-share all-cash offer represented a “superior offer” when compared to Netflix’s existing agreement, which stood at $27.75 per share and covered only WBD’s studio and streaming assets.

NETFLIX $NFLX DECLINES TO RAISE OFFER FOR WARNER BROS. pic.twitter.com/4SmV8oxopP
— Wall St Engine (@wallstengine) February 26, 2026

Netflix received a four-day window to present a competing bid. The streaming company opted not to match the offer.

“The deal is no longer financially attractive,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Wall Street rewarded the disciplined approach. Netflix stock advanced roughly 10% in post-market trading.

A week earlier, Netflix had voluntarily extended WBD’s negotiating window by seven days to enable talks with Paramount, giving shareholders an opportunity to consider all options. Sarandos told CNBC the move was designed to ensure “complete clarity and certainty.”

In the end, that extension paved the way for Netflix’s departure from the competition.

Paramount’s Acquisition Terms

Paramount’s $31-per-share all-cash bid covers the entirety of WBD — going well beyond the studio and streaming units to incorporate CNN, TBS, TNT, HBO Max, Food Network, and multiple sports rights packages.

This marks a considerably more comprehensive deal than Netflix’s original target.

Furthermore, Paramount agreed to pay the $2.8 billion termination fee that WBD owes Netflix, while accepting a $7 billion reverse termination fee if the deal doesn’t secure regulatory approval.

WBD CEO David Zaslav described the deal as one that would “create tremendous value” for shareholders after the board officially approved the merger agreement.

Paramount Skydance CEO David Ellison said the offer delivers “superior value, certainty and speed to closing.”

Regulatory Hurdles Ahead

The deal is far from complete. California Attorney General Rob Bonta declared Thursday that the merger “is not a done deal,” citing an active probe by California’s Department of Justice.

The combination will need approval from both the U.S. Department of Justice and European competition regulators.

Paramount’s funding arrangement — which includes ties to tech billionaire Larry Ellison and formerly involved Jared Kushner’s Affinity Partners investment firm — has drawn scrutiny over potential political connections to the Trump administration.

Kushner’s firm exited the deal in December. Nevertheless, questions about the transaction’s political dimensions remain, particularly regarding CNN, which Trump has repeatedly attacked and suggested should be sold off in any WBD transaction.