Why Netflix doesn't want to acquire Warner Bros. Discovery anymore
What's the story
Netflix has surprised the entertainment industry by pulling out of its bid to acquire Warner Bros. Discovery. The decision paves the way for Paramount Skydance to take control of the Hollywood studio. Netflix's co-CEOs Ted Sarandos and Greg Peters said that they were being financially disciplined in their approach toward this acquisition deal.
Market reaction
Shareholders skeptical about the deal
Bloomberg reports that Netflix's shareholders were skeptical about the acquisition deal. The company's share price has fallen by 30% since the announcement of this agreement. However, news of Netflix's withdrawal from the bidding war sent its stock soaring by nearly 14%. This indicates a positive market reaction to Netflix's decision not to go through with the acquisition.
Bidding war
Paramount made a higher offer
Netflix's resolve to go through with the acquisition was reportedly tested when Paramount made a higher offer. The company appeared ready to continue the bidding war for some time. However, by the time Sarandos met the Trump administration officials on Thursday, he may have already decided to withdraw from the race. This was further corroborated by his statement, "I took your advice," after US President Donald Trump advised him not to overpay for Warner Bros.