Netflix increasingly appears to be a real contender in the Warner Bros. Discovery bidding war, and that prospect may be making some on Wall Street nervous.
Shares of Netflix slipped 5.3% to $103.48 on Wednesday afternoon as speculation has arisen that WBD’s board has warmed to the idea of Netflix as an acquirer. The streaming giant is only interested in the streaming and studio assets of WBD, unlike Paramount, which wants the entire company.
Adding to the investor worry was Netflix co-founder and chairman Reed Hastings, who disclosed on Tuesday that he had sold $40.7 million worth of shares on Monday.
That’s the same day that Netflix had submitted a mostly cash offer, while Paramount submitted an all-cash offer co-financed by the Apollo Group and three Middle Eastern sovereign wealth funds, according to various press reports.
While WBD may be keen on the idea of Netflix making a deal, investors are less enthusiastic, given the fact that it would be the streaming giant’s largest deal ever and likely go through a long and complicated regulatory process.
Indeed, Paramount’s biggest selling point is that it will likely have the smoothest road to getting a deal done, while Netflix will have to fend off accusations that it will have too much power over the entertainment industry.
A representative for Netflix wasn’t immediately available for comment.
