Shares of Netflix (NFLX 0.01%) fell 12.9% in December 2025, according to data from S&P Global Market Intelligence. The retreat capped a volatile year for Netflix investors, landing 30% below June's all-time high of $133.91 per split-adjusted share. As of this writing on Jan. 8, 2026, the stock trades at $91.18 per share.
The culprit behind Netflix's recent price drops? That would be the ongoing buyout drama over Warner Bros. Discovery (WBD 0.52%).
NASDAQ: NFLX
Key Data Points
A tale of two buyout bids
On Dec. 5, 2025, Netflix issued a negotiated buyout bid. In a fairly complex deal structure, Netflix would first allow Warner Bros. to separate itself from the Discovery-branded set of cable TV stations, as the company announced 7 months ago. Then, Netflix would let the Discovery business go and pursue an $82.7 billion cash-and-stock deal for the movie studio and streaming service assets remaining under the Warner Bros. name.
The Netflix offer launched with unanimous support from Warner Bros. Discovery's board of directors, who also reiterated their commitment to this contract on Jan. 7. A competing bid for the whole streaming, studio, and cable TV package from Paramount Skydance (PSKY 0.20%) was rejected twice despite a larger enterprise value of $108.4 billion.
And Netflix's stock kept sliding lower. At this point, it's difficult to see which of the possible outcomes Netflix investors seem to hate more:
- Adding $50 billion of new debt to the balance sheet, taking on $10.7 billion of Warner Bros. Discovery's debt, and diluting Netflix's stock with $11.7 billion of new stock, all in exchange for a world-class content library and a leading challenger to Netflix's global video-streaming service.
- Watching Paramount Skydance take home the whole Warner Bros. Discovery package and selling it off in pieces, the way hostile takeovers and leveraged buyouts usually work out.
- Getting the shareholder approvals but falling short in the regulatory review. In this case, Netflix would owe a $5.8 billion breakup fee to Warner Bros. Discovery, and the media industry will stay fairly recognizable for a while.
Bids, counter-bids, management interviews, and analyst reviews made each of these options look likely at some point in December, and Netflix's stock just kept falling.
Image source: Netflix.
Uncertainty is the only sure thing here
This drawn-out price drop is probably just another example of a classic investing paradigm. Investors hate uncertainty, and nobody knows for sure what will happen to Warner Bros. Discovery, Netflix, or Paramount Skydance right now.
Honestly, the third option might be the most likely outcome. Netflix's negotiated deal could fail the regulatory reviews, and Warner Bros. Discovery's board will probably pull every available string to stop Paramount Skydance's hostile takeover attempt (a strategy that involves clearing out the current boardroom).
Netflix will report Q4 2025 results after the closing bell on Jan. 20, giving management an opportunity to explain their thinking in greater detail. The other two players in this drama will do the same in February, at the tail end of the upcoming earnings season. These reports and earnings calls should shed new light on this unpredictable bidding war.
In the meantime, Netflix's stock looks deeply undervalued amid these uncertainty-based discounts. Whatever happens, I'm sure Netflix will find a shareholder-friendly way forward -- as usual. From Blockbuster to the streaming explosion of 2019, Netflix can thrive in the face of challenges.
