Why Netflix Will Do Well — And Why I Sold the 105 Put
A Strategic Summary of Netflix’s Warner Bros. Deal
After reading Netflix’s Form 425 filing regarding its proposed deal with Warner Bros. Discovery (WBD), my takeaway is simple: this is a strategic, growth-focused move, not a desperate one.
Netflix’s leadership is very clear about the rationale. This deal is not about duplication or cost-cutting through studio closures. Instead, it is about complementary strengths. Warner Bros. brings what Netflix historically did not have at scale:
• A deep portfolio of iconic franchises
• A century-old theatrical distribution engine
• A world-class studio operation
• A massive film and TV content library
Netflix, on the other hand, brings:
• Global streaming dominance
• Superior data-driven content distribution
• Best-in-class technology and personalization
• Strong free cash flow generation
The filing repeatedly emphasizes that this combination is pro-consumer, pro-creator, and pro-growth. Even after combining, Netflix highlights that total U.S. viewership share would only move from 8% to 9%, still well behind YouTube and other potential combinations. This matters because it directly addresses regulatory risk.
From a regulatory standpoint, Netflix is positioning the deal as non-monopolistic and innovation-enhancing, not consolidation for dominance. That framing is critical—and smart.
Why This Deal Strengthens Netflix, Not Weakens It
One of the most important clarifications in the filing is Netflix’s commitment to preserve Warner Bros.’ theatrical releases. This removes a major fear from the market: that Netflix would abandon theaters and damage long-standing Hollywood economics.
Netflix openly admits that theatrical releases were never its business—but now, with Warner Bros., they will be. This means Netflix is adding a new revenue engine, not disrupting an existing one. If this deal had happened earlier, movies like Superman or Minecraft would still have premiered in theaters. That statement alone shows respect for legacy distribution while expanding Netflix’s reach.
Another key point is job preservation. Netflix stresses there is no overlap in studio operations, meaning this is not a cost-cutting merger but a capability-building one. That narrative matters politically, socially, and operationally.
Most importantly, Netflix repeatedly emphasizes that organic growth remains the core focus. The company is not relying on this deal to survive or justify its valuation. It already sees “huge potential ahead” even without Warner Bros. That tells me this deal is upside, not a crutch.
Why I Am Bullish on Netflix Long Term
Stepping back from the filing, my broader thesis on Netflix remains intact.
Netflix has:
• Strong pricing power
• Global scale that no competitor has matched
• Improving margins and cash flow
• A proven ability to adapt (ads, password sharing, live content)
Unlike many media companies, Netflix is not buried under legacy cable decline. It does not need to defend dying revenue streams. Every strategic decision Netflix makes is forward-looking.
The Warner Bros. deal, if approved, accelerates Netflix’s evolution from a pure streaming company into a full-spectrum entertainment platform—streaming, theatrical, franchises, IP monetization, and global distribution.
That is not bearish. That is structural strength.
Why I Sold a Netflix 105 Put
With that backdrop, my options trade becomes straightforward.
I sold a cash-secured put at the 105 strike on Netflix because:
1. I am comfortable owning Netflix at 105
If the stock falls and I get assigned, I am buying a high-quality company at a level I consider attractive relative to its long-term value.
2. The 105 level provides a margin of safety
This strike represents a meaningful discount from recent trading levels and prices in a lot of fear, uncertainty, and headline risk around regulation and deal complexity.
3. Volatility works in my favor
M&A headlines inflate implied volatility. Selling puts allows me to monetize that uncertainty rather than fear it.
4. Time decay is on my side
As long as Netflix stays above 105, every passing day works in my favor. Even if the stock trades sideways, I still win.
5. This aligns with my bullish-but-disciplined view
I am not chasing upside blindly. I am being paid to wait. Either I collect the premium, or I acquire shares at a price I already like.
Risk Awareness (But Not Fear)
Of course, I acknowledge the risks:
• Regulatory delays
• Integration complexity
• Market volatility
• Broader macro uncertainty
Netflix itself is very transparent about these in the forward-looking statements. But none of these risks invalidate the core business or long-term trajectory.
Importantly, Netflix does not promise outcomes—it emphasizes preparation, data, and strategic alignment. That is exactly what I want to see from management.
Final Thoughts
To me, this Form 425 filing reinforces—not weakens—my confidence in Netflix.
This is a company that:
• Thinks long term
• Communicates clearly
• Understands regulators
• Respects creators and consumers
• And continues to compound value through smart execution
Selling the Netflix 105 put is simply an extension of that belief. I am positioning myself to either earn income or own a world-class business at a favorable price.
That is not speculation.
That is structured optimism with discipline. 📊
@TigerEvents @MillionaireTiger @TigerStars @TigerClub @Daily_Discussion
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