Netflix Lost. Netflix Won. Film at 11.
Netflix Lost. Netflix Won. Film at 11.
Anders Bylund, The Motley FoolFri, February 27, 2026 at 6:03 PM UTC
0
Key Points -
Netflix declined to match Paramount Skydance's $31-per-share bid for Warner Bros. Discovery.
Instead of buying a studio, Netflix will invest $20 billion in content production this year.
Netflix's stock buyback program is back in action after being paused during the bidding war.
10 stocks we like better than Netflix ›
Netflix (NASDAQ: NFLX) has officially ended its bid to acquire the studio and streaming operations of Warner Bros. Discovery (NASDAQ: WBD). The target company had a week to think about a raised bid from Paramount Skydance (NASDAQ: PSKY), and came back leaning toward a Paramount deal in half that time.
Pending regulatory approval, it's a done deal. Netflix shares opened Friday's trading 11.6% higher on the news. Warner Bros. stock fell by roughly 2% and Paramount soared more than 18% higher. Combined, the three stocks added approximately $40 billion of market value today.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Netflix dodges a $40 billion debt bomb
Was this the best outcome for Netflix? Maybe not from an industry domination perspective, but it certainly puts Netflix in a less stressful financial situation.
Netflix had $9.0 billion of cash and $13.5 billion in long-term debt at the end of 2025. To finance its all-cash buyout bid, the company would have needed more than $40 billion of additional debt. Instead, it walks away with a $2.8 billion deal breakup fee, to be paid by Paramount.
As exciting as a mega-studio combining Warner Bros. and Netflix might have been, a clean balance sheet (with an extra $2.8 billion) could be the ideal outcome for Netflix and its shareholders.
Three people walking away from a Stranger Things banner.
Image source: Netflix.
What Netflix will do with all that cash
And the cash is going to work right away. Netflix's management promised to invest $20 billion in content production this year, up from a prior 2026 production commitment of $11.5 billion. The stock buyback program is also back in action, having been paused to conserve cash for the Warner Bros. deal.
Advertisement
The resumed buybacks strike me as a smartly opportunistic move. Netflix's stock posted a drawdown of 43% from last summer's peak, mostly due to concerns about the expensive buyout battle. Canceling shares at a deep discount should be a shareholder-friendly idea and a good use of spare cash.
Netflix stock looks like a deep-discount deal at this point, even after Friday's jump.
Should you buy stock in Netflix right now?
Before you buy stock in Netflix, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Netflix wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $456,188!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,133,413!*
Now, it’s worth noting Stock Advisor’s total average return is 916% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 27, 2026.
Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.
Source: “AOL Money”
