Netflix Buys Warner Bros - My Analysis

December 08, 2025

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Happy Monday!

In one of the most significant media transactions in modern history, Netflix has announced it is acquiring Warner Bros.

The market reaction was immediate: Netflix stock sold off 2.9%, while Warner Bros. Discovery (WBD) jumped 6.19%.

For WBD shareholders, this is a massive win—a premium exit for a stock that was struggling just a year ago. But for Netflix investors, the picture is much more complex.

In this week’s video, I break down the deal structure, the regulatory hurdles, and whether this move cements Netflix as the king of media or if they just made an $83 billion mistake.

Your Monday Topics:

  • Is Netflix’s big acquisition a mistake?

  • Dividend Raises This Month

  • Top Software Stock to Buy for 2026? - CRM Stock Analysis

The Key Story

Netflix Buys Warner Bros: The $83 Billion Mistake?

🤝 The Deal at a Glance

Netflix isn't buying everything. They are strategically leaving behind the declining legacy assets.

  • The Price Tag: $72 billion in equity with a total enterprise value of $82.7 billion (including debt).

  • The Structure: WBD shareholders receive a mix of cash ($23.25) and stock (~$4.50), valuing shares at a premium of ~$27.75.

  • What Netflix Gets: The "Crown Jewels." This includes the film/TV studios, the video game studios (Harry Potter, DC Comics, Game of Thrones), and the consolidation of HBO Max.

  • What Gets Left Behind: The declining linear cable assets (CNN, Discovery Networks) will be spun off into a new separate company.

🐂 The Bull Case: Total Domination

If you put on a "John D. Rockefeller" hat, this move is competitively genius.

  • Content Supremacy: Netflix acquires a century of iconic IP. Think The Sopranos, Succession, Batman, and Friends.

  • Removing Competitors: By absorbing HBO Max, Netflix eliminates a major rival. It also blocks Big Tech competitors (Amazon, Apple) from buying these assets to compete. Also, legacy media competitors like Paramount and Comcast will not be able to merge to reach scale and compete. It’s taking chips off the table.

  • Gaming Acceleration: A detail many are missing—Netflix acquires WBD’s gaming studios (makers of Hogwarts Legacy), instantly accelerating their move into video games.

  • Pricing Power: With this library, Netflix has undeniable leverage to raise prices.

🐻 The Bear Case: Buying Baggage?

However, the deal introduces risks that Netflix, previously a clean "pure-play" tech stock, has never faced.

  • Valuation Risk: Netflix trades at a high tech-multiple (40x earnings). Absorbing legacy media assets and debt could cause "multiple compression," where the market values Netflix more like a traditional media company (10-20x earnings).

  • Culture Clash: Netflix was a tech company. Warner Bros is deeply entrenched in Hollywood unions and traditional infrastructure. This will make AI adoption and agility much harder. Netflix is now 100% a media business (a big one!).

  • Regulatory Hell: Expect 18+ months of headlines regarding antitrust approval. The Trump administration’s stance is unpredictable, and Hollywood unions are already pushing back.

📉 The Bottom Line

This deal likely creates the single most dominant entertainment platform in history. However, for shareholders, the next two years could be dead money due to regulatory overhang, dilution, debt, and multiple compression.

Is the long-term dominance worth the short-term pain?

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Dividend News

🚀 Dividend Raises This Month

  • GGG - Graco raises dividend by 7.3% to $0.295

  • MORN - Morningstar raises quarterly dividend by 9.9% to $0.50

  • HPE - Hewlett Packard Enterprise raises dividend by 9.6% to $0.1425

  • WEC - WEC Energy raises dividend by 7% to $0.9525

  • UTZ - Utz Brands raises quarterly dividend by 3.3% to $0.063

  • RHP - Ryman Hospitality Properties raises quarterly dividend by 4.3% to $1.20

  • OC - Owens Corning raises quarterly dividend by 15% to $0.79

  • ECL - Ecolab raises quarterly dividend by 12% to $0.73

  • EMN - Eastman Chemical raises quarterly dividend by 1.2% to $0.84

  • CARR - Carrier Global raises quarterly dividend by 6.7% to $0.24

  • RJF - Raymond James Financial raises quarterly dividend by 8% to $0.54

  • DTE - DTE Energy raises quarterly dividend by 6.9% to $1.165

  • NUE - Nucor raises quarterly dividend by 1.8% to $0.56

  • OMC - Omnicom raises dividend by 14.3% to $0.80

  • HPQ - HP raises dividend by ~4% to $0.30

  • HRL - Hormel Foods raises quarterly dividend by 0.9% to $0.2925

  • NKE - Nike raises dividend by 2.5% to $0.40 (est)

  • PHM - PulteGroup raises dividend by 18.2% to $0.26

  • A - Agilent Technologies raises dividend by ~3%

  • MZTI - Lancaster Colony raises quarterly dividend by 5.3% to $1.00

  • DLB - Dolby Laboratories raises dividend by 9.1% to $0.36

  • LZB - La-Z-Boy raises dividend by 10% to $0.242

  • MKC - McCormick & Company raises quarterly dividend by 6.7% to $0.48

  • RGLD - Royal Gold raises quarterly dividend by 5.6% to $0.475

  • MSI - Motorola Solutions raises dividend by 11% to $1.09 (est)

  • MRK - Merck raises quarterly dividend by 4.9% to $0.85

  • ARMK - Aramark raises dividend by 14.3% to $0.12

  • PWR - Quanta Services raises dividend by 10% to $0.11

  • VRT - Vertiv raises dividend by 66.7% to $0.0625

  • SR - Spire raises dividend by 5.1% to $0.825

  • AIZ - Assurant raises quarterly dividend by 10% to $0.88

  • AMKR - Amkor Technology raises dividend to $0.08352

  • ADP - Automatic Data Processing raises dividend by 10.4% to $1.70

  • AFL - Aflac raises dividend by ~5%

  • ALV - Autoliv raises dividend by 2.4% to $0.87

  • FCPT - Four Corners Property Trust raises quarterly dividend by 3.2% to $0.3665

  • TSN - Tyson Foods raises quarterly dividend by 2% to $0.51

  • FNF - Fidelity National Financial raises dividend by 4% to $0.52

  • CHRW - C.H. Robinson Worldwide raises dividend by 1.6% to $0.62 (est)

  • SNA - Snap-On raises dividend by 14% to $2.12 (est)

  • EVRG - Evergy raises quarterly dividend by 4.1% to $0.695

  • COP - ConocoPhillips raises quarterly dividend by 7.7% to $0.84

Earnings News

Top Software Stock to Buy for 2026? - CRM Stock Analysis

📉 Salesforce: The Most Hated Stock in Tech?

Software stocks are in the penalty box. Despite reporting a strong Q3 earnings beat that popped the stock 5%, Salesforce (CRM) is still down 28% over the past year.

In fact, while revenue has nearly doubled over the last five years, the stock price has remained effectively flat.

Is this a value trap, or the buying opportunity of 2026?

The Valuation Disconnect

The market is compressing software valuations across the board (Adobe is suffering the same fate). However, the financials tell a different story than the stock chart:

  • Historic Lows: Salesforce is trading at a ~20x Forward P/E ratio—its lowest valuation since 2015.

  • Cash Machine: They are guiding for $41.5 billion in revenue for fiscal 2026.

  • Analyst Upside: The consensus price target is $366, implying a massive 53% upside from current levels.

The AI Threat vs. The AI Opportunity

Why is the stock down? The Bear Case is simple: Investors fear AI will automate jobs, reducing the need for "seat-based" software licenses. Plus, revenue growth has slowed to single digits (~9%).

However, the Bull Case is ignored:

  • High Switching Costs: Companies can't just "turn off" Salesforce; it is deeply integrated into their data and workflows.

  • Agent Force: Their new AI platform is already at $1.4 billion in Annual Recurring Revenue (up 114% YoY). This shifts their model from selling "seats" to selling "outcomes."

My Verdict: If you are a value-oriented investor, Salesforce is getting too cheap to ignore.

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That’s it for this week’s update. If you want to follow along in real time, analyze these tickers, or track your own portfolio, jump into DividendData.com. You’ll also find our Discord community and my AI research tool there. Hit reply and tell me what you’re buying—I may feature a few notes next week.

📅 Keep Investing. Stay informed.

– Zach
Founder, Dividend Data

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