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Investor Concerns Weigh on Netflix Stock After Warner Bros. Deal
Netflix’s deal with Warner Bros. wasn’t surprising, but getting it cleared by regulators is likely to be more difficult, AJ Bell’s Danni Hewson wrote in a note Friday.
“Splashing out so much cash was never going to make the share price jump with delight, but if this deal can clear those significant regulatory hurdles quickly there are likely to be considerable cost savings to be made,” she says. How much of those savings flow to subscribers and whether Netflix’s pricing power grows will be closely scrutinized in the coming months, she adds.
Investor sentiment was also weighed down by concerns about execution risk and the idea that Netflix might need to sharply raise subscription prices to justify the price tag, potentially slowing future revenue growth, wrote XTB’s Kathleen Brooks.
