MW The real winner in the battle for Warner Bros. isn't who you think it is
By Philip van Doorn
Also in Weekend Reads: How to invest during the AI transition, what OpenAI needs to do and a warning for aspiring day traders
The deal is done - subject to a potentially arduous regulatory approval process - with Paramount Skydance now set to acquire Warner Bros. Discovery.
Netflix ended its bidding war with Paramount Skydance for Warner Bros. Discovery after the market close on Thursday.
The news: Trump allies David and Larry Ellison win battle for Warner Bros. Discovery after Netflix bows out
Netflix's $(NFLX)$ co-CEOs, Ted Sarandos and Greg Peters, said in a press release that the price they would have to pay to match Paramount Skydance's $(PSKY)$ latest offer of about $111 billion for Warner Bros. Discovery $(WBD)$, was "no longer financially attractive." Netflix's final offer for WBD had been valued at about $82.7 billion.
On Tuesday, Mark Hulbert had written that walking away from the attempt to acquire WBD would be the best outcome for shareholders of either Netflix or Paramount. This was because more than one detailed study of thousands of merger deals showed very high failure rates, with a failed merger being defined as "when, several years post-acquisition, the combined wealth of the acquiring company and the target company is lower than it would have been had the two companies remained separate."
Paramount's stock was up 20% in afternoon trading on Friday, but it appeared that Netflix's shareholders felt like winners, as well, since that stock was up 12.5%. From Dec. 4, the day before Netflix made its first offer for WBD, through Thursday, Netflix's stock had declined 18%. Investors had been "growing skeptical of the risk of overpaying for a business that has failed to deliver a clear economic return to its past several owners," MoffettNathanson analyst Robert Fishman wrote in a note to clients late on Thursday.
AT&T $(T)$ has provided an example of what can happen if a company overpays for acquisitions. The telecom giant acquired Time Warner for $85 billion in June 2018. And that followed AT&T's acquisition of DirecTV for about $67 billion in July 2015.
This chart shows how AT&T's stock has performed against the S&P 500 SPX since Friday, May 16, 2014, the last close before the company announced the DirecTV deal on May 18, 2014.
These are total returns with reinvested dividends through Thursday:
AT&T has underperformed the S&P 500 by a wide margin since it announced its deal to acquire DirecTV in May 2014.
For this period of nearly 12 years, AT&T's stock returned 96%, while the S&P 500 returned 353%, according to FactSet.
And here is how AT&T's stock performed from April 7, 2022, the day before the company completed its deal to sell WarnerMedia to the newly formed WBD, through Thursday:
AT&T has outperformed the S&P 500 since completing its sale of WarnerMedia to the newly formed Warner Bros. Discovery in April 2022.
The studies cited by Hulbert, AT&T's stock performance in the years following its acquisition of DirecTV and since it divested WarnerMedia, and the market's negative reaction to Netflix's bidding for WBD and subsequent relief on Friday, underscore a message for acquisitive executives: Don't overpay.
Should you, as an investor, fear AI?
There are always broad themes that investors react to over the short term, and the stock market's performance should be expected to be lumpy. The S&P 500 has shown double-digit gains for four of the five most recent full calendar years, alongside an 18.1% decline in 2022, with dividends reinvested. For 30 years through 2025, the index's average annual return with dividends reinvested was 10.4%, according to LSEG.
Many of the recent negative narratives for investors have centered on the threat to software developers and other industries from the deployment of generative artificial-intelligence technology. Then again, AI might help companies in myriad industries become more efficient, which can be a boon to investors even as it disrupts the careers of workers in the affected industries.
Joy Wiltermuth spoke with professional investors and strategists who offered advice on how you can protect yourself during this period of AI disruption while also seeking investment opportunities.
OpenAI keeps grabbing cash, but they need to do this
OpenAI, the developer of ChatGPT, announced a $110 billion funding round with contributions from Amazon, Nvidia and SoftBank.
OpenAI's latest funding round to raise $110 billion includes contributions of $50 billion from Amazon (AMZN) and $30 billion apiece from Nvidia (NVDA) and SoftBank (JP:9984).
William Gavin outlined operating improvements investors will want to see from OpenAI ahead of the company's expected initial public offering.
Here is more of this week's coverage from the MarketWatch technology team related to AI:
-- Block says AI will allow it to cut more than 4,000 jobs. Some argue that's not the whole story.
-- Software stocks bounce as Nvidia shares falter. Is a new rotation trade in store?
-- AMD's stock rockets as Meta deal serves as major validation point for investors
-- Workday's stock dives as earnings reveal the cost of competing in AI
-- Salesforce's record $50 billion stock-buyback plan is proving controversial on Wall Street
AI and lending: 'I'm shocked that people are shocked,' says JPMorgan executive about private-credit meltdown
A warning to aspiring day traders
Don't Short Yourself - MarketWatch's new weekly newsletter - offers smart tips to help you earn and grow money.
The latest Don't Short Yourself newsletter includes Joseph Adinolfi's warnings about trading in stock options, tax advice from Beth Pinsker and Andrew Keshner, and money tips from MarketWatch readers.
How about early retirement?
This week in the Help Me Retire column, Alessandra Malito answered questions from a woman who has been experiencing mental and physical stress from a high-paying job and is considering retiring before she turns 50. Here are the numbers along with career and lifestyle choices for her and her husband to consider while making a complicated decision.
More from Alessandra Malito: How boomers became the richest generation - and why Gen X, Gen Z and millennials may never catch up
Signals of a bottom for tech or software stocks
The Need to Know column features professional investors' and traders' observations and opinions every weekday. You can sign up to have it waiting in your in-box.
On Thursday, Tom Lee, the co-founder and head of research at Fundstrat, said financial markets were "far along" in a bottoming for software and tech stock prices, and even for virtual currencies.
Two difficult scenarios for helping elderly relatives suffering from dementia
Quentin Fottrell is the Moneyist.
Quentin Fottrell - the Moneyist - helps MarketWatch readers with advice on how to handle all sorts of financial problems, some of which result from family conflicts over money or inheritance.
This week he helped two readers who had questions on how to help relatives suffering legal difficulties stemming from dementia:
-- 'I am fearful': My ailing relative is being forced into assisted living. What can I do?
-- My brother is paranoid, alone and forgot that he sold his house. What can I do?
A reader shares good news - and some advice - with the Moneyist: After 46 years working, I'm not retiring - instead, I take a vacation every month.
Is it time for you, or someone you care about, to clean up a credit mess?
Genna Contino explained how people can use personal loans to pay off high-interest credit-card debt. The end result can be a very healthy one, but the catch is that it requires so much discipline.
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-Philip van Doorn
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February 27, 2026 15:37 ET (20:37 GMT)
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