Feb. 2 at 6:56 PM
$NFLX mkt cap loss since announcement to acquire
$WBD =
$85B vs cost
$82.7B - essentially, market has already written off the cash value of this interest for the next 20 years
To fund the deal, Netflix is utilizing a combo of existing
$9.3B cash &
$59B bridge loan, which will eventually be refinanced into long-term senior unsecured notes
Cost to finance debt (back of napkin - incl existing) at
$4.5B yearly
Netflix guides
$11B FCF in FY26
Deal expected to close in late FY26 or early FY27
For the first 12–18 months post-close, Netflix’s FCF expected to remain flat. The additional cash generated by HBO/WB Studios will be almost entirely consumed by the interest on the bridge loan used to fund the deal
Mgmt is betting on
$2B–
$3B in annual cost savings by 2028. If they hit those targets, FCF could jump toward
$14B in 2028.....but the market is skeptical
Netflix will carry a massive
$44.7B in goodwill which risks an impairment adjment & debt-to-EBITDA jumps from a safe 1.2x to nearly 4.0x
