Netflix (NFLX 0.10%) ended the last trading day of February with a more than 13% rally after it decided to walk away from its bidding war with Paramount Skydance (PSKY 0.55%) over Warner Bros. Discovery (WBD 0.72%).
With what's happened since this whole saga began, there's reason to believe that the streaming giant's rally could continue in March.
Let's not make a deal
The deal that Netflix was pursuing for most of Warner Bros. Discovery's assets would have brought heavy-hitting franchises like Harry Potter, Game of Thrones, and the DC comic book universe to the streamer. Netflix could have monetized those franchises and others in a variety of ways, including by creating new shows and movies.
Source image: Getty Images.
It could have also used those franchises to attract fans to its new Netflix House destinations. The first two locations in Philadelphia and Dallas feature themed games, escape rooms, food, and merchandise based on Netflix properties such as Wednesday and Stranger Things.
In addition, Netflix is expanding into video podcasting. Access to Warner Bros.' assets could have bolstered that business through sponsorships. The company could have also created exclusive video podcasts featuring actor interviews, episode recaps, and more, which would help its podcast segment attract viewers, and conceivably drive new subscriptions.
The reason the stock price jumped
The deal to buy the streaming and studio operations from Warner Bros. Discovery was viewed by some investors as problematic because, while it offered potential opportunities for growth, the price was high, and it didn't seem crucial to Netflix's long-term success.
Even the company acknowledged this reality in its statement detailing the decision not to counter Paramount's latest offer. To paraphrase the announcement, it would have been nice to close the transaction, but the required price to do so was no longer appealing.
The path forward
Since early December 2025, what has been weighing on the share price has been uncertainty around how this deal would play out over the long term. Now, Netflix shareholders no longer have to worry about the potential financial implications of the deal.
NASDAQ: NFLX
Key Data Points
With the uncertainty now removed, the stock price rallied, and that rally could continue in March. However, the end of the Warner Bros. bid is just one aspect investors should consider before buying shares.
With a forward price-to-earnings ratio of about 30.5, Netflix is priced for steady growth, but it's not a value play.
Those who take a long-term investing approach to this company will want to consider the upsides of its opportunities in video podcasting, live sports, advertising, and international markets.
From here on out, the story will no longer be about whether it can make a pricey Warner Bros. deal pay off, but about how well Netflix can execute with its core business and its newer endeavors to create value for shareholders.
