Netflix Shares Jump 9% After-Hours as Company Walks Away From Warner Bros. Discovery Deal

Netflix, Inc. (NFLX) shares surged nearly 9% in after-hours trading Thursday after the streaming leader announced it would not match a higher competing bid from Paramount Skydance for Warner Bros. Discovery, ending months of merger speculation.

The stock closed regular trading at $84.59, up 2.29% or $1.89 on volume of more than 85 million shares. After-hours prices climbed to around $92, with some platforms showing peaks near $92.56, reflecting strong investor approval of Netflix’s decision to avoid an expensive escalation.

Netflix co-CEOs Ted Sarandos and Greg Peters stated the company declined to raise its offer after Warner Bros. Discovery’s board deemed Paramount Skydance’s latest proposal a “superior” one under their existing merger agreement. “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” they said. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.”

The move follows Netflix’s December agreement to acquire Warner Bros. Discovery’s studio and streaming assets in an $83 billion deal, including assumed debt. Paramount’s revised bid, reportedly valued at $111 billion for the full company, prompted the shift. Netflix stands to receive a substantial breakup fee, estimated around $2.8 billion in some reports.

The announcement provided relief to investors concerned about integration risks, added debt and dilution from a larger acquisition. Netflix shares had fallen sharply earlier in February, dipping toward the 52-week low of $75.01 amid deal uncertainty, down from a 2025 high of $134.12.

Despite the M&A drama, Netflix’s core business shows strength. The company ended 2025 with over 325 million paid subscribers and projected 2026 revenue of $50.7 billion to $51.7 billion, up 12-14%. Advertising revenue is expected to roughly double to $3 billion, fueled by the ad-supported tier launched in 2022.

Content spending will rise about 10% to $20 billion, supporting a robust slate of originals. Free cash flow has improved, offering flexibility for buybacks or other priorities.

Analysts praised the disciplined approach, noting Netflix’s focus on organic growth amid competition from Disney+, Amazon and others. Technical support sits near $80-82, with resistance around $90-95. The stock’s beta indicates elevated volatility typical for media-growth names.

Broader markets were mixed Thursday, but Netflix’s relief rally stood out in the sector. Traders will watch subscriber trends, ad momentum and any regulatory updates as Netflix refocuses inward.

The decision clears the path for Paramount Skydance to advance its Warner Bros. deal, potentially reshaping Hollywood. For Netflix, avoiding overpayment bolsters its position as streaming’s leader while preserving capital for future opportunities.