Netflix Stock Soars to Best Day in Nearly a Year: Investors Hope Deal Falls Through

Netflix, Inc. rose nearly 6% on Wednesday and extended gains in after-hours trading, as retail traders see this as a potential turning point for the stock amidst a long and complicated process to acquire Warner Bros.

The rally, Netflix's strongest since April 2025, comes as some investors bet on the streaming giant stepping back from the transaction. This scenario is viewed as positive, given Paramount Skydance's aggressive bidding and the lingering regulatory overhang.

An options trader bet almost $14 million that Netflix losing out on its bid to acquire WBD would actually be a win, according to a Bloomberg analysis. The analysis noted that this person or entity bought 55,000 May $90 call options on Wednesday and sold the same number of $105 calls to partially fund the position.

“$NFLX if they cancel their bid the stock may have bottomed yesterday,” said a Stocktwits user. Another said they hope the rebound is the start of a reversal and that “NFLX doesn't screw us by engaging further in this bidding war with Paramount.” If the deal is canned, Netflix would resume its share buyback, this time with an extra $2.8 billion in the bank from the breakup fee, a user said.

Not all are as upbeat, though. “$NFLX selling here for small profit,” said another user. “I am scared what the news will be tomorrow… Brutal price movement until the vote and maybe even extension of the vote because of the bidding war,” said a user.

Stocktwits sentiment for NFLX has climbed sharply since late Tuesday and was ‘extremely bullish’ as of the last reading. Message volume for the ticker surged 186% over the past week.

Earlier in the week, Paramount submitted a higher, $31-per-share bid to acquire the entire Warner Bros. enterprise. Netflix can raise its bid in the coming days. The Warner Bros. board will then make its decision on the deal on Mar 20.

Netflix's Wednesday gains came despite news that Republican attorneys general from 11 states had called for a Department of Justice probe into the Netflix-WBD deal over market concentration concerns - another signal that investors are increasingly betting that Netflix would ultimately back out.

Netflix CEO Ted Sarandos - who earlier discussed the concerns and offered assurances before a Senate antitrust committee - is set to meet White House officials on Thursday, Politico reported.

On the agenda are Netflix's bid for the media giant and President Donald Trump's demand that Netflix fire board member Susan Rice, a former Biden administration adviser, according to Politico sources.

Shares of Netflix and rival bidder Paramount have been under pressure over the last few months. After both companies expressed interest, Warner Bros accepted Netflix's deal in December. However, Paramount has continued its pursuit, with Warner Bros last week agreeing to formally hear its fresh offer.

Netflix shares are down nearly 40% from their peak on Jun 30, while Paramount shares are down nearly 50% from their peak on Sept 23. Warner Bros shares are climbing as the deal proceeds.

Warner Bros is scheduled to report its fourth-quarter results after the markets close on Thursday. Bernstein, which raised its WBD price target to $27.75 from $23.5, believes the report will be important for understanding implications for the Netflix and Skydance deal process.