To The Moon

$Netflix(NFLX)$ $Warner Bros. Discovery(WBD)$  $Paramount Skydance Corp(PSKY)$  

Europe has become the decisive battleground for the $83B $NFLX–$WBD endgame, and markets are already repricing the outcome.

🇺🇸➡️🇪🇺 US pressure is not landing, so the resistance has shifted offshore. The anti-$NFLX campaign has now firmly moved into Europe as scrutiny intensifies around the proposed $83B transaction involving $WBD. This is no longer Washington noise, it is a regulatory and cultural battleground.

🎬 David Ellison of $PSKY has been on the ground in Paris, meeting directly with President Macron and senior film executives. Paramount teams have made coordinated stops across the UK and Germany, while theatre groups, including $AMC, are actively lobbying in Brussels. Europe is now the swing vote, and that geographic pivot matters.

📊 Event markets are repricing the outcome in real time. Contracts have swung toward $NFLX today, with $PSKY odds of ending up in control of $WBD falling to 19% as of 11:30 a.m. ET, down sharply from 31% yesterday. Probability is moving faster than headlines, and that divergence is the tell.

📉 On fundamentals, KeyBanc maintains Overweight on $NFLX but cuts its price target to $110 from $139, a 20.9% reduction. The analyst cites Warner deal uncertainty and difficult 2025 content comps as near-term overhangs to the P/E multiple. Importantly, long-term margin and monetisation drivers remain intact, with 2026E revenue growth still projected at 13%. This is valuation compression risk, not a broken business.

📆 Earnings are the next catalyst. $NFLX is set to report Q4 2025 results post-market Tuesday, 20Jan26. Consensus expects revenue of ~$11.96B, up 16.7% y/y, and net income of ~$2.37B, up 28%, per Bloomberg. The focus will be on 2026 guidance, advertising momentum, and whether deal uncertainty continues to weigh on forward multiples.

📢 Advertising remains the swing factor. Adoption of the ad-supported tier continues to scale, with estimates pointing to ~$4–5B in ad revenue by 2026 after likely doubling in 2025. Q4 holiday ad spend should offer clearer evidence of whether monetisation is accelerating in line with management’s long-term strategy.

💰 Margins and cash generation are under scrutiny. Management targets ~29% operating margin in 2025, with Street estimates just over 32% in 2026. Free cash flow guidance for 2025 was raised to ~$9B. Confirmation of durability here would materially stabilise sentiment.

📉 The chart still dictates discipline. $NFLX is down roughly 30%, trading within a defined descending structure. The name flipped green to red in just 32 seconds today, a sign of fragile positioning. $82.50 remains my absolute major support level that must hold. We are getting close. Near term the stock is oversold, but the chart is still saying patience.

📈 Optics matter too. $AMD (Advanced Micro Devices) has now overtaken $NFLX in market capitalisation. That psychological shift matters for flows, index weight conversations, and narrative rotation.

🎥 Addressing theatrical concerns directly, $NFLX co-CEO Ted Sarandos told The New York Times that the company’s ~$82.7B deal to acquire $WBD’s streaming and studio assets will not harm the theatrical industry. Sarandos said Netflix plans to operate Warner’s theatrical business with 45-day release windows and aims to “win box office,” a notable shift designed to ease regulatory and cultural resistance, particularly in Europe.

🇺🇸 Adding another layer, a White House disclosure shows President Trump has purchased at least $50M in municipal and corporate bonds through December, including debt issued by $NFLX, $CRWV, $GM, $BA, $OXY, and $URI. Political capital showing up in the capital stack is not something I ignore in a deal-heavy tape.

⚖️ This is no longer a debate about content quality or long-term viability. This is about structure, probability, and regulatory gravity, and Europe now decides how the next chapter trades.

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