In a high-stakes battle that’s captivated Wall Street, Hollywood, and the world’s streaming audience, Warner Bros. Discovery (NASDAQ:WBD) finds itself at the center of a fierce takeover war between Netflix and Paramount Skydance. With billions of dollars on the table, activist investors leaning in, and regulatory authorities circling, the outcome could reshape the entertainment industry for years to come.
As of February 16, 2026, shares of Warner Bros. Discovery were trading at $27.99, just shy of the $30 per share ceiling set by Paramount’s revised bid, according to 24/7 Wall St. The company’s stock had soared 174% over the past year but had slipped 2.9% year-to-date, a sign of the uncertainty gripping investors as the bidding war intensifies. The air of suspense is thick—will Netflix’s $72 billion bid win out, or will Paramount’s aggressive $108.4 billion counteroffer, which even covers a $2.8 billion Netflix breakup fee, carry the day?
Retail traders have been anything but idle. Reddit’s r/WallStreetBets has seen a flurry of activity, with bullish sentiment reaching a score of 75 after news broke that Warner Bros. was reconsidering Paramount’s sweetened offer. A viral post about the revised bid, which covers the Netflix breakup fee, racked up over 2,700 upvotes, reflecting the feverish interest among everyday investors. As 24/7 Wall St. pointed out, "any optimism around the stock is driven by real concerns."
But optimism is tempered by hard realities. Warner Bros. Discovery’s fundamentals remain shaky: revenue has declined 5.1% annually over the past two years, and free cash flow margins show no projected improvement for 2027. The company trades at 147 times trailing earnings, a figure that all but screams minimal profitability. Activist investor Ancora Holdings, which built a $200 million position in Warner Bros., has openly expressed skepticism about the Netflix deal’s uncertain cash consideration and the unknown equity value of the Discovery Global spinoff.
The drama escalated on February 17, 2026. On that day, Warner Bros. Discovery officially rejected the latest hostile takeover bid from Paramount Skydance, led by David Ellison, and gave the company seven days—until February 23—to submit their "best and final offer," as reported by Benzinga. The company indicated it expects a higher offer from Paramount. Notably, under the terms of the merger agreement, Netflix retains the right to match any offer Paramount makes. In pre-market trading that same morning, shares of Warner Bros. Discovery and Paramount each climbed 2.72%, while Netflix was up 0.70%.
Paramount had informally floated a higher share price of $31, which piqued the interest of the Warner Bros. board. However, in a letter to the Paramount board, Chairman Samuel DiPiazza Jr. and CEO David Zaslav made it clear: "Paramount’s proposal was not deemed superior to Netflix’s merger offer." The leadership reaffirmed their commitment to the Netflix transaction, underscoring the company’s preference for what they see as a more stable and certain path forward.
The Netflix-Warner Bros. Discovery merger process, meanwhile, is advancing on a procedural level. On February 17, Warner Bros. Discovery filed its definitive proxy statement and scheduled a special meeting for March 20, 2026, to allow shareholders to vote on the deal. Netflix’s offer values Warner Bros. Discovery at approximately $82.7 billion in enterprise value, structured as an all-cash transaction at $27.75 per share. According to a press release cited by PR Newswire, "Netflix is the superior deal and the only deal before WBD stockholders." The statement stressed that Netflix’s proposal offers "incredible value and certainty to WBD stockholders with a clear path to timely regulatory approval."
Regulatory scrutiny, however, looms large over both offers. Netflix and Warner Bros. Discovery have already submitted their Hart-Scott-Rodino filings and are actively engaging with the U.S. Department of Justice, the European Commission, the UK’s Competition and Markets Authority, and the Committee on Foreign Investment in the United States (CFIUS). Paramount Skydance’s bid, while valued at a whopping $108 billion, is weighed down by $84 billion in pro forma debt and an estimated 7x leverage ratio post-merger. Their plan includes significant cost savings targets exceeding $16 billion and a rapid deleveraging strategy that, critics warn, could lead to deep job cuts and operational risks across the industry.
Netflix’s transaction is described as a vertical merger of complementary assets, which many believe has a clearer path to regulatory approval compared to Paramount’s highly leveraged buyout proposal. As Netflix stated in its press release, "A PSKY transaction does not have an easier or faster path to regulatory approval and PSKY's financing challenges and rapid deleveraging plans pose tremendous risk to the entertainment industry." The company went on to highlight that Paramount’s plan would require "unprecedented job cuts (on top of previous PSKY layoffs)" and warned that the only way to meet its leverage targets would be through even deeper reductions, potentially harming the industry’s creative workforce.
Despite the noise, the Warner Bros. Discovery board has recommended that stockholders vote in favor of the Netflix transaction at the upcoming March 20 meeting. Yet, the uncertainty is palpable. Prediction markets on Polymarket had already closed in December 2025 with $457,975 in total volume, betting that no acquisition would be completed by May 31, 2026—a sign that many expect the bidding war, and the regulatory wrangling, to drag on well into the year.
Meanwhile, Netflix’s own stock has not been immune to turbulence, down 18% year-to-date and trading under $77 as of mid-February. Warner Bros. Discovery, for its part, remains a prize being hotly contested, but also a company facing real operational headwinds, with revenue declines and little sign of near-term profitability improvement.
The broader entertainment sector is watching closely. Recent merger- and deal-related headlines have often produced muted or negative one-day reactions, even on seemingly positive developments. As Argus noted, only Warner Bros. Discovery has been appearing in momentum scans, and its movement looks company-specific rather than part of a wider industry trend. The stakes are enormous, not just for shareholders but for the thousands of employees, creators, and audiences worldwide whose future entertainment choices may be shaped by the outcome of this corporate tug-of-war.
With a special shareholder meeting looming and both Netflix and Paramount Skydance jockeying for position, Warner Bros. Discovery stands at a crossroads. The next chapter in this saga will be written not just in boardrooms and trading floors, but in the regulatory halls of power and, ultimately, at the ballot box for WBD investors. For now, the only certainty is uncertainty—and the world is watching to see which media giant will emerge victorious.