Netflix concluded 2025 with a stock split and a deal to acquire Warner Bros. The acquisition brings challenges, like billions in debt and concerns over pricing power. Despite a share price drop, the acquisition could position Netflix as a major player in entertainment. The deal involves a $82.7 billion enterprise value and a $59 billion bridge loan.

Warner Bros. Discovery was set to split, with Netflix eyeing the future Warner Bros. entity. However, Paramount Skydance’s takeover attempt complicates matters. Regulatory approval is crucial due to the companies’ size. Netflix believes in the deal’s success, backed by a $5.8 billion termination fee. The acquisition could enhance Netflix’s content offerings and boost revenue.

Netflix anticipates benefits from acquiring Warner Bros., focusing on valuable assets like the studio division and HBO. The deal may diversify revenue through theatrical releases and strengthen Netflix’s position in the industry. Revenue growth and rising cash flow suggest Netflix is well-positioned, despite concerns about pricing leverage and regulatory approval. Netflix’s return on equity has steadily risen over the past decade, with occasional dips that it has recovered from. Its low P/E ratio and a potential game-changing acquisition make it an appealing stock for 2026. The Motley Fool’s Stock Advisor team has identified 10 top stocks for investors to buy now, excluding Netflix. These stocks have the potential for significant returns in the future. Stock Advisor has a total average return of 991%, outperforming the S&P 500 by 795%. Don’t miss out on the latest top 10 list and join an investing community designed for individual investors. *Stock Advisor returns as of December 29, 2025. Robert Izquierdo has positions in Netflix, Paramount Skydance, Walt Disney, and Warner Bros. Discovery. The Motley Fool also has positions in and recommends Netflix, Walt Disney, and Warner Bros. Discovery.

Read more at Yahoo Finance: Is Netflix a Must-Own Stock for 2026?