- Netflix stock has declined by nearly 7% in the last month, with the Warner Bros acquisition bid overshadowing strong fundamentals
- Netflix will release its quarterly earnings report on January 20, and that could inject a fresh impetus in the market
- Regulatory bureaucracy could last beyond 12 months, adding pressure on Netflix
If you have been keeping an eye on Netflix (NASDAQ: NFLX), you have likely noticed the red on your screen It’s down almost 7% in the past month, and about 30% from its high point in mid-2025. You may find this drop intriguing, especially given the company’s strong fundamentals, yet it underscores investor apprehension about the deal’s implications.
Why Netflix Stock is Dropping
Investors generally dislike uncertainty, and this deal is a giant question mark. The main thing is that big deals create uncertainty, and people in the market don’t usually like that. Back on December 5, 2025, Netflix said they wanted to buy Warner Bros. for around $82.7 billion. This would put major titles like Game of Thrones, Harry Potter and DC Comics under Netflix’s control.
The bid’s destructive nature stems from several factors. Primarily, it introduces significant debt. The offer includes both cash and stock from Netflix, at about $27.75 for each Warner Bros. Discovery share. To get the cash, Netflix would have to borrow about $50 billion. After spending years convincing Wall Street that they weren’t relying on debt to grow, this feels like a complete turn-around.
Also, there are regulatory concerns. Antitrust checks could delay or stop the deal. Paramount made a hostile offer of $30 per share for all of Warner Bros. Discovery to counter offer, creating a bidding war, which makes things even more uncertain. Even though Warner’s board said they still support the Netflix deal on January 7, 2026, the market worries that Netflix might have to overpay or face a large breakup fee.
Is Now a Good Time to Buy?
One might want to evaluate if this dip presents a buying opportunity. Some analysts believe the stock is oversold, mentioning Netflix’s steady subscriber numbers and potential recovery after the Q4 earnings report on January 20, 2026. AOL says the stock is cheap at a forward P/E of 38, considering the expected 15% earnings and benefits from Warner Bros.’ content, like HBO titles.
For those who are in for the long haul, this drop could be a good time to buy into the streaming leader. If the deal goes through, Netflix will be a content giant. If not, Netflix can go back to its profitable model. However, with a regulatory review expected to last 12 to 18 months, the overhang is a story that won’t reach its finale anytime soon.
Netflix Stock Price Forecast Today
Technically, Netflix stock is in a bearish trend, trading under its 200-day Moving Average of $113.28. Indicators suggest the stock is very oversold. The RSI has dropped to 29.45, suggesting shares are oversold. The pivot is at the 20-day SMA at $93.22 and the downside will likely continue if resistance persists at that level. The stock has a primary support at $89.67, representing the lower end of its recent range.
A break below that level could send the action lower to test $88.00. A return above the pivot could see the next resistance at $95.00, with a break above that level potentially clearing the path to test $97.10. A break above that mark would suggest the downtrend might be ending.
Netflix stock daily chart with key support and resistance levels on January 9 2026, created on TradingView
It adds debt, waters down shares, brings in regulation worries, and could take up management’s time. The back-and-forth offers only make things murkier.
Paramount’s $30 all-cash offer is higher than Netflix’s bid. This creates a “bidding war” scenario where Netflix might have to increase its price, further straining its balance sheet or diluting its current shareholders to win.
Potentially yes for long-term investors. The stock drop looks like it went too far, and Netflix still has a lot of room to grow. But, there are still some risks in the short run.