Netflix's 5.97% Surge Propels It to 14th-Most-Traded as WBD Bidding War Intensifies

Market Snapshot

Netflix (NFLX) surged 5.97% on February 25, 2026, as its stock volume spiked to $5.55 billion, a 117.36% increase from the prior day. The company ranked 14th in trading activity across the market, reflecting heightened investor interest amid ongoing developments in its high-stakes bid for Warner Bros.WBD-0.86% Discovery (WBD).

Key Drivers

The immediate catalyst for Netflix’s rally was Paramount Global’s hostile $31-per-share offer for WBDWBD-0.86%, which outbid Netflix’s $27.75-per-share proposal. This escalation forced NetflixNFLX+5.97% into a critical four-day window to either match Paramount’s terms or risk losing its target. The increased competition for WBD’s assets created a surge in speculative trading, with options traders betting $14 million that Netflix would benefit from a failed bid. The strategy involved purchasing May $90 call options, suggesting market participants anticipated a sharp price rebound if Netflix walked away from the deal and collected a $2.8 billion breakup fee.

Underlying the stock’s volatility was a broader debate over Netflix’s financial strategy. The company’s proposed $82.7 billion acquisition of WBD’s film and streaming assets—requiring $52 billion in new debt—has raised alarms among investors and regulators. The deal would push Netflix’s pro forma debt to $85 billion, a stark departure from its historically lean balance sheet. Analysts highlighted the risk of credit rating downgrades and potential liquidity constraints, which could weigh on long-term shareholder value. Meanwhile, WBD shareholders found themselves in a rare position: a 15% upside potential if Paramount’s $32-per-share offer succeeds, though the spin-off of WBD’s linear cable networks remains contentious.

Regulatory scrutiny added another layer of uncertainty. The U.S. Department of Justice (DOJ) has signaled an “intensive” antitrust review, citing concerns about a potential Netflix-WBD merger dominating the streaming market. With the DOJ and 11 Republican attorneys general scrutinizing the deal, the path to approval appears fraught. The political dimension intensified as Netflix CEO Ted Sarandos met with the White House to discuss the bid, amid pressure from President Trump to remove board member Susan Rice. These developments underscored the deal’s sensitivity in an election year, where media consolidation could face heightened political opposition.

The broader industry context also played a role. The streaming sector is nearing maturity, with organic subscriber growth plateauing and companies turning to acquisitions to maintain dominance. A successful Netflix-WBD merger would give the combined entity control of 30.3% of the U.S. streaming market, reshaping competition with rivals like Disney and Amazon. However, integration challenges loom large. Merging Netflix’s tech-driven culture with WBD’s legacy studio operations—a task that has historically plagued media mergers—could lead to executive departures and operational friction. Market observers are monitoring for signs of “merger fatigue,” which could signal deeper structural issues in the deal’s execution.

Finally, the stock’s performance reflected a tug-of-war between short-term risks and long-term potential. While the $85 billion debt load and regulatory hurdles pose immediate threats, the acquisition of premium content like the DC Universe and Harry Potter franchises could position Netflix as a streaming monopoly. Investors are thus weighing the trade-off between near-term volatility and the prospect of a redefined media landscape. As the next 96 hours unfold, the outcome of this bidding war will likely shape the trajectory of the streaming wars for years to come.