"It could be dead money until we get a meaningful catalyst. What we would like to see is how a deal with Warner Brothers is going to drive earnings growth and fuel cash flow generation."
"I think what has upset the Street is the content spend plus, you know, changing the offer for Warner to all cash,"
Netflix posted record results and beat recent earnings estimates while its share price dropped to a 52-week low. Market reactions reflect concern about shrinking margins driven by higher content spending and investment in advertising infrastructure. Uncertainty over the potential acquisition of Warner Bros, including an all-cash offer amendment, has intensified worries about future cash generation and the true cost of the deal. Investors are focused on how any Warner purchase would affect earnings growth and cash flow, and many expect the stock to trade range-bound until a clear catalyst demonstrates accretive financial returns.
Read at Fortune
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