NEW YORK, February 27, 2026, 16:23 EST — After-hours
- Netflix shares closed up 13.4% after the company refused to raise its bid for Warner Bros Discovery assets.
- Investors cheered the retreat as a sign of price discipline after weeks of deal-driven pressure on the stock.
- Attention now shifts to capital returns and what Netflix signals about strategy next week.
Netflix, Inc. (NFLX) stock jumped on Friday, ending the regular session up $11.32, or 13.4%, at $95.91. The rally followed the company’s decision to walk away from a months-long contest for Warner Bros Discovery’s studio and streaming assets. 1
The jump matters because the bid had turned into an overhang on the stock and on how Netflix might deploy cash, with investors wary of the price and the shift in posture. Netflix shares had fallen more than 18% since it unveiled the Warner agreement in early December, and analysts had debated whether the move was defensive or a break from its build-first playbook. Ben Barringer, head of technology research at Quilter Cheviot, summed up the mood: management should pay a fair price, “but to not overpay.” 2
Netflix’s co-CEOs Ted Sarandos and Greg Peters said matching Paramount Skydance’s latest terms would have pushed the deal past the point of return. In a statement, they said “the deal is no longer financially attractive” and added Netflix expects to invest about $20 billion this year in films and series, while also resuming its share repurchase program. 3
The retreat clears the way for Paramount Skydance to take the whole company: Warner Bros signed a $110 billion deal with Paramount on Friday morning, according to an audio clip of a company townhall. Netflix is due a $2.8 billion termination fee — a breakup payment triggered when a signed deal is abandoned — with Paramount paying the fee on Warner’s behalf, according to a regulatory filing. 4
Paramount’s bid was $31 per share, topping Netflix’s $27.75 offer, and it also lifted the fee it would owe Warner if regulators block the transaction to $7 billion. The Ellison Trust increased its equity commitment to $45.7 billion, while banks expanded debt financing to $57.5 billion, the terms showed. 5
But Friday’s relief trade comes with a big hinge: regulatory review. Any delay or pushback on the Paramount-Warner tie-up could keep the sector tied up in deal noise, while Netflix still has to show investors it can keep growing without reaching for a headline acquisition.
For Netflix, the other risk is simpler. It just promised heavy content spending and a return to buybacks in the same breath; if margins or subscriber trends disappoint, the market can turn quickly on a rally that was sparked by relief, not new operating numbers.
Traders will watch for more detail on the repurchase restart and any fresh filings tied to the terminated Warner pact, including what restrictions fall away now that the bid is off.
The next scheduled marker is Wednesday, March 4, when Netflix CFO Spence Neumann is due to take questions at the Morgan Stanley Technology, Media & Telecom Conference. 6
