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Netflix Shares Drop 7% in Europe After Q4 Results

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Shares of Netflix listed in Frankfurt fell sharply on Wednesday, dropping around 7% in early trading, despite the company beating expectations for fourth-quarter revenue and earnings. The decline reflects investor concern over Netflix’s capital allocation as it pursues a high-stakes acquisition.

Netflix told investors it would pause share buybacks in order to preserve cash to help fund its proposed deal for Warner Bros Discovery, where it faces competition from rival bidders. By 0714 GMT, the stock was down 7% in European trading, after closing 0.8% lower in Tuesday’s regular U.S. session.

The streaming giant’s shares have fallen roughly 20% since it launched its bid for Warner Bros Discovery earlier this year, highlighting market unease over the scale, financing and regulatory risks of the transaction. Investors appear to be weighing the long-term strategic benefits of expanding Netflix’s content library against the near-term financial strain of a costly acquisition.

While Netflix’s core business continues to show resilience, the ongoing bidding war and decision to halt buybacks have added volatility to the stock, particularly in overseas markets.

Netflix Will Now Pay All Cash for Warner Bros to Keep Paramount at Bay

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Netflix has shifted to an all-cash offer for Warner Bros Discovery’s studio and streaming assets, seeking to block rival bids from Paramount and strengthen its position in a heated consolidation battle.

The revised bid values Warner Bros at $82.7 billion, or $27.75 per share, replacing an earlier cash-and-stock proposal. The move has unanimous backing from Warner Bros’ board and is designed to provide shareholders with greater certainty amid volatility in Netflix’s own share price. Netflix co-CEO Ted Sarandos said the all-cash structure would accelerate the timeline to a shareholder vote, expected by April.

Both Netflix and Paramount have been vying for Warner Bros’ film and television studios, extensive content library, and major franchises including Game of Thrones, Harry Potter, and DC Comics characters such as Batman and Superman. Paramount, led by Skydance’s David Ellison, has pressed shareholders to reconsider its rival bid, but Warner Bros has repeatedly rejected it, arguing that Netflix’s offer delivers superior value and lower execution risk.

Market reaction was mixed, with Netflix shares edging higher while Paramount and Warner Bros shares slipped. Analysts said Netflix’s cash-only pivot raises pressure on Paramount to submit a clearly superior proposal if it hopes to stay in the race. Regulatory scrutiny remains a concern, as lawmakers have warned that further media consolidation could limit competition and raise prices for consumers.

Big Tech to Avoid Strict Obligations in EU Digital Rules Overhaul, Sources Say

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Major U.S. technology companies including Alphabet, Meta Platforms, Netflix, Microsoft and Amazon are set to avoid strict new regulatory obligations under the European Union’s upcoming overhaul of digital rules, according to people with direct knowledge of the matter.

Despite strong lobbying from telecoms companies for tougher measures targeting Big Tech, the companies will instead fall under a voluntary framework as part of the planned Digital Networks Act (DNA), the sources said. The European Commission has declined to comment.

The DNA, which will be presented by EU tech chief Henna Virkkunen on January 20, is aimed at boosting Europe’s competitiveness and encouraging greater investment in telecoms infrastructure. The proposal will still need approval from EU member states and the European Parliament before it can become law.

Under the draft rules, Big Tech firms will be encouraged to cooperate voluntarily with telecoms operators in discussions moderated by BEREC, rather than being subject to binding obligations similar to those imposed on telecoms providers. One source described the approach as a “best practices regime” with no new mandatory requirements.

The planned overhaul will also address spectrum policy, with the Commission setting out guidance on licence duration, sale conditions and pricing methodologies to be used by national regulators during spectrum auctions, which often generate billions of euros for governments. While the goal is to harmonise spectrum allocation across the EU and reduce regulatory burdens for telecoms firms, some national regulators are expected to resist what they may see as increased centralisation of power.

In addition, the Commission plans to issue guidance on the rollout of fibre infrastructure, a key element of the EU’s digital strategy to narrow the gap with the United States and China. Governments may also be allowed to extend the 2030 deadline for replacing copper networks with fibre if they can demonstrate they are not ready to meet the target.

The EU’s digital policy push has drawn criticism from Washington in recent years, with U.S. officials arguing that new rules unfairly target American companies. Brussels has repeatedly rejected those claims.