A $350 billion streaming giant with 325 million subscribers just crashed to 52-week lows—down 38% in 6 months—on fears of an $82.7 billion acquisition.
While retail capitulated at $79.23, here's what Wall Street saw:
✅ 30 out of 40 analysts: Buy rating maintained through the selloff
✅ Average price target: $114 (38% upside from $82)
✅ RSI: 18-23 (extreme oversold—most extreme since 2024)
✅ Current price: $82.94 (just $3.66 above 52-week low)
What crushed the stock:
Netflix announced an $82.7 billion all-cash deal to acquire Warner Bros Discovery's studios and streaming business. The market panicked over $42 billion in debt and DOJ antitrust reviews. Stock crashed 38%.
What everyone ignored:
Q4 earnings crushed expectations:
- Revenue: $12.05B (+18% YoY)
- Subscribers: 325 million (new record)
- Operating margins: 29.5% (expanding to 31.5% in 2026)
- Free cash flow: $11B projected for 2026
- Ad revenue: Doubling from $1.5B to $3B
They're acquiring HBO Max (128M subscribers), Warner Bros studios, DC Universe, Harry Potter, and Game of Thrones—from a position of strength, not weakness.
The technical setup:
Textbook capitulation:
- RSI at 18-23 (comparable to 2022 lows that preceded 194% rally)
- Trading at same price as BEFORE acquisition announcement
- Support holding at 52-week lows
Upcoming catalysts:
- April 16: Q1 earnings
- April: Warner Bros shareholder vote
- June: DOJ decision timeline
- Risk-reward: 5% downside vs. 38-83% upside to analyst targets (7.6:1 to 16.6:1)
Read The Full Analysis: Why This Capitulation Created a Strategic Entry Point
When 75% of analysts maintain Buy ratings while a stock hits 52-week lows on record earnings... you're witnessing maximum fear, not maximum risk.
To your profits,
Direction Alerts
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