Netflix Dropping WBD Bid Is 'Best Move' For Investors, Says Gary Black, Sees 18% Upside

Netflix Inc. (NASDAQ:NFLX) shares soared nearly 9% in overnight trading on Thursday as the streaming giant officially declined to raise its offer for Warner Bros. Discovery (NASDAQ:WBD).

Financial Discipline Over M&A

Prominent investor Gary Black, Managing Partner of The Future Fund, praised the retreat, stating the move is the “best move for $NFLX shareholders.” Black noted that by avoiding a costly bidding war, the company preserves its balance sheet while maintaining its strategic path.

The market is now looking toward a full recovery of the stock's recent losses. Before the initial Dec. 5 bid for WBD, Netflix was trading near the $100 mark. Following Thursday's close of $84.59, the shift back to fundamental growth represents a significant opportunity.

“We believe… NFLX stock can return to the ~$100/share level,” Black noted, representing an 18% upside from Thursday's closing price. Investors responded immediately to the news, sending shares up to $92.77 in extended trading as the market embraced Netflix’s strategy.

The $2.8 Billion Windfall

The decision to walk away comes after WBD's board labeled a rival bid from Paramount Skydance Corp. (NASDAQ:PSKY) as a "superior proposal." In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters clarified that while the merger was a “nice to have” at the original price point, matching the higher offer was no longer “financially attractive.”

A critical component of Netflix's exit is the massive termination fee attached to the original agreement. Because Netflix held a signed agreement for WBD's streaming business at $27.75 per share, WBD's acceptance of the $31 per share Skydance deal triggers a payout to Netflix.

“NFLX should still get its $2.8B termination fee since it simply declined to raise its offer,” Black explained.

He suggested this capital could be immediately redeployed into high-value content, speculating on a potential move into live sports: “NFL Saturday night football anyone?”

NFLX Underperforms In 2026

Shares of NFLX have fallen by 9.78% year-to-date, while the Nasdaq 100 index has declined by 0.68% in the same period. The stock was 31.01% lower over the last six months and 14.56% over the year. On Thursday, the stock closed 2.28% higher at $84.59 apiece and rose further by 9.09% in overnight trading.

Benzinga’s Edge Stock Rankings indicate that NFLX maintains a weak price trend over the short, medium, and long terms, with a solid quality ranking.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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