Netflix shares drop after Paramount launches hostile takeover bid

Core Viewpoint - Netflix's stock has declined following Paramount's hostile takeover bid, raising concerns about Netflix's ability to complete its acquisition of Warner Bros. Discovery (WBD) [2][3] Group 1: Stock Performance and Acquisition Details - Netflix shares fell nearly 3.5% to $96.79 after Paramount offered $30 per share for WBD, valuing the deal at $78 billion [2] - Netflix's proposed acquisition of WBD includes a $27.75 per share offer, totaling $72 billion, while also assuming over $10 billion in WBD debt, bringing the total deal value to $82.7 billion [2] Group 2: Analyst Insights - Analyst Jeffrey Wlodarczak downgraded Netflix's stock rating from buy to hold, expressing concerns that Paramount's bid could raise the acquisition cost for Netflix [3] - Wlodarczak highlighted potential regulatory issues that may alter the terms of Netflix's deal, questioning what modifications might be necessary [3] Group 3: Customer Engagement Concerns - Wlodarczak raised doubts about Netflix's customer engagement levels, which are crucial for subscriber retention, noting that the expensive acquisition reflects Netflix's worries about competition from platforms like TikTok and YouTube [4] - YouTube has become a significant player in streaming, accounting for 12.9% of U.S. TV viewing time, compared to Netflix's 8% [5] - Despite Netflix's claims of healthy engagement growth, with increases of 15% in the U.S. and 22% in the U.K. from Q4 2022 to Q3 2025, analysts question the sustainability of this growth [6][7]