Netflix shares fell on Monday as investors and analysts reacted coolly to the streamer’s pending acquisition of Warner Bros., a deal that is already being viewed as one of the most complex, and risky, bets in the entertainment industry.
Multiple Wall Street firms downgraded the stock, citing integration challenges, regulatory hurdles, and uncertainty over whether Netflix can successfully absorb a legacy studio with sprawling operations, deep debts, and long-term contractual obligations.
Analysts said the acquisition introduces execution risks that could disrupt Netflix’s core streaming business, potentially stretching resources at a time when global competition is intensifying and content spending remains high.
While the deal could eventually give Netflix access to major franchises and a vast content library, the near-term outlook has rattled investors. Monday’s stock pullback reflects broader concerns that the company may face a difficult transition period as it merges its fast-moving digital model with Warner Bros.’ traditional studio structure.
Netflix has yet to detail how it plans to reorganize Warner assets or streamline operations, leaving markets uneasy about cost synergies and long-term strategy.
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