Netflix And Warner Bros.: Forget The Noise, Let's Reason From First Principles
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Given Mahlangu183 FollowersFollow5ShareSavePlay(13min)Comment(1)SummaryNetflix announced an $82.7 billion acquisition of Warner Bros. Discovery, excluding cable networks, primarily financed with cash.I view the deal as value accretive for both NFLX and WBD. I believe it will result in more growth and dominance for NFLX and a better margin profile for WBD.Bearish sentiment on NFLX is overblown, and this has to do with the fact that it's easy for us analysts to project margin impact as opposed to the growth profile. Wachiwit/iStock Editorial via Getty Images Investment thesis On the 5th of this month, Netflix (NFLX) announced an $82.7 billion acquisition deal of Warner Bros. Discovery (WBD); around 85% of the acquisition is going to be financedThis article was written byGiven Mahlangu183 FollowersFollowFull-time Equity Analyst and part-time retail investor with a bias for high quality stocks trading at discounted prices. over the past 5 years I've been retail investing and learning more about how the stock market works, following the work of Ben Graham and Joel Greenblatt. Equity Markets are fascinating as they give us an analytical overview of how global markets are performing. Seeking Alpha is an incredible platform for me to share my research and analysis with fellow investors and analysts.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You