TLDRs;
- WBD shares jump 6%, driven by Netflix acquisition and M&A speculation.
- Netflix gains studios, HBO, and top franchises, shareholders receive cash and stock.
- WBD spins off Discovery Global, isolating debt from streaming and studios assets.
- Analysts cautious due to regulatory risks, deal timing, and Discovery Global valuation uncertainty.
Warner Bros. Discovery (NASDAQ: WBD) has emerged as one of 2025’s most volatile stocks, thanks to months of speculation culminating in a blockbuster acquisition.
This week, Netflix announced its agreement to acquire WBD’s film and TV studios, along with HBO and HBO Max, in a cash-and-stock deal valued at $72 billion, or $82.7 billion including debt. This announcement sent WBD shares soaring over 6% to close at $26.08 Thursday, doubling their value from earlier in the year.
The acquisition not only marks one of the largest media deals of the decade but also fundamentally reshapes investor expectations for WBD stock.
Warner Bros. Discovery, Inc., WBD
WBD Stock Surges on Acquisition News
Over the past year, WBD has delivered a staggering 132% return, outperforming rivals like Fox and Spotify. Analysts attribute this surge to a combination of persistent breakup rumors, a competitive bidding process involving Netflix, Paramount Skydance, and Comcast, and the finalization of Netflix’s winning offer.
Currently, the market is pricing in both the potential closure of the deal and the value of WBD’s cable networks, soon to be spun off into Discovery Global. Investors are navigating a scenario where WBD is less a traditional media turnaround story and more an event-driven M&A play.
Inside the Netflix–WBD Mega-Deal
Under the deal, Netflix will acquire WBD’s studios, HBO, HBO Max, and key franchises such as the DC superhero universe, “Game of Thrones,” and “Harry Potter.”
Shareholders will receive $23.25 per WBD share in cash, plus approximately $4.50 in Netflix stock, representing a total of $27.75 per share.
The offer carries a 121% premium to WBD’s pre-speculation price, with $5.8 billion in reverse breakup fees for Netflix if regulators block the merger. WBD shareholders are set to benefit not only from cash and Netflix stock but also from a stake in the spun-off Discovery Global, which will retain most of the company’s $38 billion debt.
Strategic Split and Financial Implications
Even before Netflix’s bid, WBD announced a separation into two publicly traded companies: Streaming & Studios, and Global Networks (Discovery Global). This split isolates high-growth assets while placing most of the debt burden on the mature cable business.
Q3 2025 results showed WBD generating roughly $9 billion in revenue with a $148 million net loss, while streaming subscriber growth slowed to 2.3 million net adds. Debt reduction remains central to the company’s strategy, with over $3.9 billion repaid in 2025 alone.
Analyst Outlook and Regulatory Scrutiny
Despite the share price surge, Wall Street consensus remains a “Moderate Buy,” with average price targets below current levels. Analysts cite regulatory risks, the 12–18 month timeline to close, and uncertainty around Discovery Global’s valuation as reasons for cautious projections.
Industry and antitrust concerns also loom large. Regulators in the U.S. and Europe are monitoring the deal for potential concentration of streaming power, while Paramount Skydance has accused WBD’s board of favoring Netflix, which could invite closer scrutiny or even a competing bid.
That said, the Netflix–WBD deal represents a pivotal moment for both companies and investors. WBD’s transformation from a debt-laden media conglomerate to a streamlined, growth-focused entity under Netflix’s umbrella could redefine the streaming landscape, but only if the deal clears regulatory hurdles and the spin-off executes as planned.
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