'Fast Money' traders talk the latest in the bidding war for Warner Bros.

Core Viewpoint - Netflix co-CEO Ted Sarandos expressed confidence in the company's future despite a recent 12% drop in stock value, indicating shareholder concerns regarding ongoing bidding dynamics and regulatory uncertainties [1]. Group 1: Bidding Dynamics - The bidding war involves multiple offers, with Paramount's bid perceived as superior, yet there is uncertainty regarding the Warner Brothers board's decision and regulatory outcomes [4][6]. - The time frame for closing the deal is lengthy, leading to a lack of confidence among arbitrage traders, who typically prefer short-term opportunities [6]. - Paramount claims to have the upper hand in regulatory approval, which could influence the perceived value of the bids [14]. Group 2: Stock Performance and Valuation - Netflix's stock is currently trading below the expected value of the deal, indicating a weakness in the offer and suggesting potential adjustments could be made, such as increasing the number of shares offered [9][10]. - The stock has seen significant trading volume, suggesting investor interest, and is viewed as undervalued compared to historical performance [12]. - Concerns about growth and acquisition costs are believed to be reflected in the current stock price, with analysts suggesting that the valuation of cable channels will be crucial in determining the deal's viability [13][14]. Group 3: Market Sentiment - There is a prevailing sentiment that many investors favor Paramount's bid over Netflix's, highlighting the competitive nature of the current market landscape [15]. - The overlap between HBO subscribers and Netflix users raises questions about the strategic value of the acquisition for Netflix, as potential cost synergies are being evaluated [14].