Chip Stock Investor Podcast Why Netflix Stock Is Down Nearly 40% -- Time to Buy the Dip?
Jan 27, 2026
They unpack why a major acquisition and rising financing costs knocked Netflix stock sharply lower. They compare subscriber metrics across streaming rivals and explain the switch to an all-cash deal. They break down where the financing comes from and how higher interest will bite free cash flow.
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Predicted Drop And Earlier Trim
- Nicholas says he predicted with high confidence that Netflix stock would fall after the Warner Bros. bid.
- He also mentioned trimming the position for semi-insiders months earlier.
Valuation Is All About Future Cash Flow
- Businesses are valued on expected future cash flows, and Netflix faces a meaningful cash-flow headwind from the WBD deal.
- Markets priced Netflix lower because anticipated free cash flow will shrink after the acquisition.
Subscriber Counts Mask Cash Reality
- Netflix, Disney, WBD and Amazon have very different subscriber footprints and growth prospects.
- Adding WBD's ~128M subs materially changes Netflix's scale but not immediate cash-generation dynamics.