Netflix (NFLX) shares are under pressure, falling more than 3% after announcing it has reached a deal to acquire Warner Bros. Entertainment. Discovery (WBD). The acquisition is priced at $30 per share, making the total deal value $82 billion.
The negative reaction from investors is not necessarily about WBD’s asset quality, but rather what the purchase signals about Netflix itself. The move effectively acknowledges that the company’s organic growth engine has stalled. To expand now, they are forced to buy revenue rather than build it. Netflix has historically received a premium rating compared to its competitors because it has a “special sauce” that others don’t. This deal indicates that the sauce has finally run out.
From a technical analysis point of view, the picture looks increasingly bleak. NFLX is currently breaking a crucial trend line dating back to October 2023, a line that has underpinned every major pivot bottom since then. This violation indicates a significant and long-term breakdown in the stock structure.
Based on this technical damage, the charts suggest a continued decline into 2026, with a downside target of $70 per share. A drop to that level would eventually remove the “Netflix premium,” bringing its valuation in line with the rest of the streaming sector — which is exactly where it belongs now that the growth narrative has changed.
