Netflix Stock Tumbles: What's Going On?

Shares of Netflix, Inc. (NASDAQ:NFLX) are falling Monday after Paramount challenged the streaming service’s winning bid for parts of Warner Bros. Discovery, Inc.

• Netflix stock is taking a hit today. Why is NFLX stock dropping?

What To Know: Paramount has launched a hostile bid to acquire all of the outstanding shares of Warner Bros. Discovery, Inc. for $30 a share. The company wants all of Warner Bros., including the Global Networks segment, and says its all-cash offer will make it easier for an acquisition to clear regulations and does not have the volatility of an equity and cash deal.

This hostile move is in response to a bidding war that Paramount lost to Netflix last week. On Friday, Warner Bros. Discovery accepted Netflix’s $82.7 billion part-stock, part-cash bid for its Warner Bros. Studios and HBO Max streaming assets.

“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion,” said David Ellison, CEO of Paramount.

Netflix’s acquisition of HBO Max would bring together two of the world’s largest streaming services, a consideration that has sparked anti-trust concerns. The deal has caught the eye of U.S. President Donald Trump, who told reporters on Sunday that a merger between Netflix and Warner Bros. would require a review and that he’ll be involved with the decision, adding that it “could be a problem.”

Paramount submitted six proposals over the course of three months, but said Warner Bros. Discovery reportedly failed to engage meaningfully with the company.

Shares of Netflix have been moving lower in recent trading sessions because of speculation that the merger of HBO with Netflix wouldn’t actually result in a significant revenue boost due to possible subscription bundling. Netflix could also reportedly fail to gain meaningful subscribers because of the existing overlap between the two subscriber bases.

NFLX Price Action: Shares of Netflix are down 4.22%, trading at $96.02 at the time of publication, according to Benzinga Pro.

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