Netflix Stock Might Be Stuck If WBD Actually Closes: Disney & Comcast Show That Big Media M&A Doesn’t Create Shareholder Returns

Say the Warner Bros deal actually closes, Netflix would effectively win the streaming wars along with YouTube.

But winning the streaming wars & doing a transformative M&A deal doesn't mean the stock will go up.

Using two examples: Disney acquired Fox for $71 billion & Comcast acquired Sky for $39 billion.

Both acquisitions made Disney+ & Peacock more competitive, but both stocks have failed to provide shareholder value over the past 5 years.

Disney is down 32%
Comcast is down 47%

I 100% agree that both companies did strengthen their streaming platforms (Disney+ and Peacock), but none of that translated into shareholder value. Scale improved. Market share improved. Financial performance did not. Megadeals can help the platform, but there is no track record in recent history that it helps the stock.

Netflix is facing a similar dynamic.

Expect 12 - 18 months of purgatory as they close the deal through regulatory scrutiny. The DoJ striking this deal down could actually help Netflix stock.

Debt load will increase dramatically and cash flow will be used to cover interest + debt payments

Even if Netflix “wins the deal,” the stock could be stuck in the same 5-year malaise Disney and Comcast experienced after their megamergers.

The market rewards operating leverage which is why Netflix outperformed Disney/Comcast in the past 5 years, not media conglomerate complexity.

Curious what others think:
Does Netflix escape the Disney/Comcast trap or are we about to watch the same movie again?