Netflix to pay ALL CASH for Warner Bros. Why the stock price tanked

Video Description

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. If you want a full deep dive into M&A with a full explanation of relative PEs, the M&A process, hands on building of M&A models, discussion of tax structuring (asset vs. stock purchases) deferred taxes and more, check out our full blown 7 hour M&A course, or our full IBD & PE course below! https://thewallstreetskinny.com/investment-banking-private-equity-fundamentals/