Netflix Inc (NASDAQ:NFLX) unveiled a $72 billion deal on Friday to buy Warners Bros Discovery (WBD) -- including its film studios, HBO, and HBO Max -- pending regulatory approval. The definitive agreement is already drawing scrutiny, however, with President Donald Trump noting it could be problematic due to the “very big market share” it would give Netflix.
In response, Rosenblatt Securities and Pivotal Research downgraded NFLX from "buy" to "neutral" and "hold," respectively, with at least four price-target hikes crossing the tape as well. The majority of analysts are still bullish toward the equity, with 33 of 47 analysts in question sporting a "buy" rating.
NFLX is now eyeing a fourth-straight loss, and is fresh off its worst week since October. The stock still sports an 8.1% year-to-date lead, and earlier fell to its lowest level since April amid pressure from the 20-day moving average.
The options pits have been optimistic, per the security's 50-day call/put volume ratio of 1.63 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all readings from the past 12 months.
Drilling down to today's activity, 286,000 calls and 184,000 puts have already exchanged hands -- triple the volume typically seen at this point. The most popular contract is the weekly 12/12 100-strike call, where new positions are currently being sold to open.
