Warner Bros

WBD

Market cap $69.8B

Netflix stunned the entertainment world this week when it declined to raise its bid for Warner Bros. Discovery, setting the stage for Paramount Skydance to win ownership of the Hollywood studio.

The streaming and entertainment industry just witnessed one of its most high-stakes megadeals ever, stunning industry observers. Not only is it historic in its size, but it is also predicted to disrupt Hollywood and the media business as we know it.

Paramount Skydance is set to gain control over Warner Bros. Discovery after Netflix withdrew.

Netflix stock soared after it gave up its bid for Warner Bros. The strategic rationale for the deal was never clear.

Paramount's David Ellison used his wealth and influence to get Warner

California Attorney General Rob Bonta says his office plans a vigorous review of the proposed Paramount–Warner Bros. Discovery merger.

Paramount Skydance received a big vote of confidence from its controlling shareholders, including the Ellison family, when they agreed to fully back an equity offering to help fund the company's deal for Warner Bros. Discovery at a big premium above Paramount's stock price.

Antitrust is a political weapon, alas, and the streamer leaned left.

The S&P 500 (^GSPC 0.43%) fell 0.43% to 6,878.88 today, on course to finish February down 1.43% -- its worst performance in 11 months. The Nasdaq Composite (^IXIC 0.92%) slid 0.92% to 22,668.21 and the Dow Jones Industrial Average (^DJI 1.05%) dropped 1.05% to 48,977.92 as inflation data and AI jitters punished tech and growth stocks.

Read the memo Paramount Skydance CEO David Ellison sent about the Warner Bros. Discovery merger.