Netflix Changes WBD Offer to All Cash | Emergency Update

Jan 21, 2026

Ask episode

Chapters

Transcript

Episode notes

Netflix just announced it plans to revise its Warner Bros. Discovery acquisition offer to an all-cash deal — but why? Wasn’t the bidding war already over? And why did Netflix stock drop after the announcement?

In this episode, Kristen breaks down the latest twist in the Netflix–Warner Bros.–Paramount saga. Paramount is now suing Warner Bros. Discovery, claiming the Netflix offer is vague and potentially undervalued. Meanwhile, Netflix’s original $27.75/share offer, which included a mix of cash and stock, is losing value as Netflix’s stock price drops. The equity portion had a collar to protect WBD shareholders — but with the stock trading below the floor, the effective deal price has lost over $0.50 per share.

We explain:

Why Netflix is switching to all-cash
How the mechanics of collars and exchange ratios affect deal value
Why Wall Street didn’t love the all-cash revision, even though it sounds shareholder-friendly
The math behind how stock vs. debt financing impacts EPS and acquisition cost
What to expect next (spoiler: Paramount could still raise its bid)

This is a real-world case study in M&A strategy, capital structure, and valuation. Stick around for the full breakdown.

Shop our Self Paced Courses:

Investment Banking & Private Equity Fundamentals HERE
Fixed Income Sales & Trading HERE

Wealthfront.com/wss. This is a paid endorsement for Wealthfront. May not reflect others’ experiences. Similar outcomes not guaranteed. Wealthfront Brokerage is not a bank. Rate subject to change. Promo terms apply. If eligible for the boosted rate of 4.15% offered in connection with this promo, the boosted rate is also subject to change if base rate decreases during the 3 month promo period.The Cash Account, which is not a deposit account, is offered by Wealthfront Brokerage LLC ("Wealthfront Brokerage"), Member FINRA/SIPC. Wealthfront Brokerage is not a bank. The Annual Percentage Yield ("APY") on cash deposits as of 11/7/25, is representative, requires no minimum, and may change at any time. The APY reflects the weighted average of deposit balances at participating Program Banks, which are not allocated equally. Wealthfront Brokerage sweeps cash balances to Program Banks, where they earn the variable APY. Sources HERE.