Netflix Shares Under Pressure Amid Intensifying Bidding War

As the holiday season approaches, Netflix shares are displaying subdued price action, masking significant strategic turbulence beneath the surface. The streaming giant is currently embroiled in a multi-billion dollar acquisition battle for Warner Bros. Discovery (WBD) while simultaneously facing a crucial test for its live-streaming and advertising platform with key NFL broadcasts today. These concurrent challenges are shaping investor sentiment toward the equity.

The primary source of recent volatility is the escalating contest for Warner Bros. Discovery. Netflix had previously announced a definitive agreement on December 5 to acquire WBD's "Streaming & Studios" division for $27.75 per share. That offer is now under substantial pressure.

According to recent reports, Paramount Skydance has submitted a competing, hostile bid for the entire WBD corporation. The key terms of this proposal are:

• An all-cash offer valued at $108.4 billion.
• Backed by an equity guarantee of $40.4 billion from Larry Ellison.
• Formally submitted on December 22.

This move by Paramount significantly overshadows Netflix's mixed cash-and-stock offer structure, compelling the WBD board of directors to re-evaluate its existing arrangement with Netflix.

Market Sentiment and Derivative Activity

The market is reacting sensitively to the risk of Netflix overpaying for coveted content assets, which include HBO, Harry Potter, and DC properties.

• Since the Netflix-WBD deal was announced on December 5, the share price has fallen from approximately $106 to $93.45—a decline of roughly 12%.
• On December 24, trading volume in NFLX put options surged to 341,000 contracts, about 37% above the daily average.

This heightened put interest signals a clear tendency among traders to hedge against further potential losses should the bidding war intensify and force Netflix to increase its offer.

Strategic Pillars: Stock Split and Content Strategy

Alongside the merger and acquisition contest, Netflix is employing structural measures and content releases to bolster its valuation and sharpen its narrative for investors.

Recent Stock Split and Price Correction

Netflix executed a 10-for-1 stock split on November 17, 2025. This action effectively scaled down the share price from previous levels around $1,340 to a range near $134, aiming to improve trading liquidity.

Since reaching those post-split highs, the equity has retreated approximately 30%, falling from around $134 to the current $93.45. Market observers attribute this weakness less to operational issues and more to the uncertainty surrounding the potential WBD transaction.

Holiday Content and Live Streaming Test

Today presents a dual stress test for Netflix's content appeal and technical infrastructure:

Should investors sell immediately? Or is it worth buying Netflix?

• Stranger Things Season 5 (Volume 2): The second part of the final season launches today. However, the series does not conclude entirely; the actual series finale is scheduled for December 31. This two-part release strategy is designed to maintain high user engagement through the end of the quarter.

• NFL Christmas Games: Netflix is streaming two prominent matchups today:

  • Cowboys vs. Commanders (1:00 PM ET)
  • Lions vs. Vikings (4:30 PM ET)

Technically flawless live streams are critical to credibly support the company's expanding advertising model and its ad-supported subscription tier. A successful broadcast would strengthen the case for further growth in the advertising business.

Analyst Perspectives on Strategic Shift

The industry-wide "media consolidation of 2025" is pressuring Netflix to supplement organic growth more aggressively with acquisitions. The proposed WBD transaction represents a defensive maneuver to secure a nearly insurmountable content library against competitors like Apple and Amazon.

This strategic pivot is dividing opinion on Wall Street:

• Jefferies maintains a "Buy" rating with a $134 price target, emphasizing the long-term value of the HBO library as justification for near-term financial strain.
• Pivotal Research holds a "Hold" rating with a $105 price target, citing the risk that Netflix may be forced to raise its offer in a heated bidding process, thereby increasing dilution for existing shareholders.

Key Levels and Upcoming Catalysts

Several factors will come into focus in the coming weeks:

• WBD Shareholder Decision: Paramount's offer of $30 per WBD share presents a clear cash premium over Netflix's proposed $27.75. This increases pressure on the WBD board to critically review its existing agreement with Netflix.

• Technical Chart Levels:

  • Netflix is currently testing a significant support zone between $92 and $93.
  • A breakdown below this level could open a path toward 52-week lows near $82.
  • Should the WBD deal collapse and Netflix withdraw, a recovery scenario is plausible, potentially driving the share price toward the 50-day moving average at $106.84.

The next major milestone is the Q4 earnings report in mid-January. This release will reveal how the NFL rights and Stranger Things viewership have impacted financials and clarify the actual financial flexibility Netflix possesses as the WBD bidding contest continues.