White House View On Netflix, Warner Bros Deal Is One Of ‘Heavy Skepticism,’ Says Trump Administration Official: Report

• The Future Fund Managing Partner, Gary Black, stated that the shareholder dilution for Netflix would be “minimal” because of the way the transaction is structured.
• Black also said he would not be surprised if Paramount Skydance makes a comeback in its bid to trump Netflix and acquire Warner Bros. Discovery.
• He cited the Ellisons' close relationship with President Donald Trump as the reason for his theory.

The White House’s view of the just-announced deal between Netflix Inc. (NFLX) and Warner Bros. Discovery Inc. (WBD) is reportedly one of “heavy skepticism.”

According to a CNBC report, doubts about the deal stem from a comment by a senior White House official, even though President Donald Trump has not yet chimed in.

Netflix said on Friday that it would acquire Warner Bros. film and television studios, HBO, and streaming service HBO Max in a cash-and-stock deal valued at $82.7 billion.

Netflix shares were down by nearly 1% in Friday morning’s trade, while Warner Bros. Discovery shares rose nearly 4%. Retail sentiment on Stocktwits around Netflix trended in the ‘extremely bullish’ territory. Netflix was the top trending ticker on Stocktwits at the time of writing.

Here’s What Gary Black Thinks

The Future Fund Managing Partner, Gary Black, stated that the shareholder dilution for Netflix would be “minimal” because of the way the transaction is structured.

Black also said he would not be surprised if Paramount Skydance Corp. (PSKY) makes a comeback in its bid to trump Netflix and acquire Warner Bros. Discovery, “given the Ellisons’ close relationship with President Trump, and uncertainty that the Justice Dept may object to this deal on competitive grounds.”

He said Paramount Skydance could try to sweeten the deal for WBD shareholders by offering to acquire the company in an all-cash transaction.

David Ellison, the current CEO of Paramount Skydance, is the son of Oracle Corp. (ORCL) co-founder Larry Ellison. 

Netflix-WBD Deal Details

According to the agreement between Netflix and Warner Bros. Discovery, each WBD shareholder will receive $23.25 in cash and $4.5 in shares of NFLX stock for each share of WBD.

The deal values Warner Bros. Discovery at $27.75 per share, implying a total equity value of $72 billion, and an enterprise value of approximately $82.7 billion.

NFLX stock is up 15% year-to-date, while WBD stock is up 141%.

Also See: Ahead Of PCE Data Release, Here's What CME FedWatch Is Indicating About December Fed Rate Cut Chances

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