On Wednesday morning, Netflix co-CEO Greg Peters faced the media and the market fresh off Warner Bros. Discovery reaffirming its preference for the big-red streamer’s $27.75 per share offer for most of Warner’s assets, rather than Paramount’s $30 per share bid for the entire company. Yet as he talked to CNBC’s Squawk on the Street, host David Faber asked Peters a question that’s been on investors’ minds: “Why are you doing this deal?”
Netflix, which was worth over $500 billion in mid-October, has seen investors send the stock from $124 per share down to around $95 and a $437 billion market cap since, voting with their wallets as the big-red streamer pursued one of Hollywood’s legacy studios. Faber said investors “worry about your multiple. They worry about what it says about how you view your own ability to grow and that your multiple, therefore, will take a hit longer-term here as you integrate this. They worry about integration.” Faber noted Netflix has never done a deal of this size, echoing a question on Netflix’s very first call announcing the Warner bid, when Peters’ own quote about media mergers of this size never working out was repeated to him.
