Stock Market Today, Feb. 27: Netflix Surges After Dropping Warner Bros. Bid and Securing Breakup Fee
Trading volume reached 190.8 million shares, coming in about 280% above its three-month average of 50.2 million shares. Netflix IPO’d in 2002 and has grown 80,341% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) slipped 0.43% to 6,879, while the Nasdaq Composite (NASDAQINDEX:^IXIC) fell 0.92% to 22,668. Within streaming media services, industry peers Walt Disney (NYSE:DIS) closed at $106.04 (up 0.46%) and Warner Bros. Discovery (NASDAQ:WBD) finished at $28.17 (down 2.19%) as investors reassessed consolidation prospects.
What this means for investors
After a drawn out and highly watched bidding war, Warner Bros. Discovery deemed the latest acquisition bid made by Paramount Skydance (NASDAQ:PSKY) superior to the previously accepted bid from Netflix. Rather than counter with a new bid, Netflix bowed out, walking away with a $2.8 billion breakup fee from the original agreement.
After Netflix stock had plunged during the bidding process, investors cheered the final outcome. Netflix showed financial discipline by not overpaying, and now has a meaningful payout to use for additional content creation or to bolster its balance sheet further.
Netflix shareholders are now ready to move forward to focus on the core business that has generated strong returns over the past several years.
Should you buy stock in Netflix right now?
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Howard Smith has positions in Netflix and Walt Disney. The Motley Fool has positions in and recommends Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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