Netflix announced a $25 billion share buyback after rejecting a deal with Warner Bros.

The market leader of streaming video services Netflix reported on April 23 that its board of directors approved an additional $25 billion share buyback program, according to a document filed by the company with the U.S. Securities and Exchange Commission (SEC). The company decided to resume returning capital to shareholders after it abandoned a $72 billion deal to buy the assets of Warner Bros. Discovery.

The company's shares rose 0.3% in trading on April 23.

The program approved by Netflix's board of directors is in addition to a share repurchase program approved by the company in December 2024 and has no expiration date. Under the program, Netflix had about $6.8 billion worth of shares available for repurchase as of the end of March, the document said. In March, Netflix bought back 13.5 million shares from shareholders for about $1.3 billion, Bloomberg specifies.

The buyback announcement came days after Netflix posted weak financial results and announced that its chairman and Netflix co-founder Reed Hastings was stepping down from the company's board of directors. Against that backdrop, Netflix's stock has fallen more than 13% since its last quarterly earnings were released on April 16.

In addition, in February, the company backed out of a massive deal to acquire part of the Warner Bros. business. Discovery, which it had announced in December. Since then, Netflix has launched a number of initiatives to improve performance, including: the acquisition of InterPositive, an AI-based movie technology startup founded by Ben Affleck; an increase in subscription prices in the US; and the launch of a gaming app for children.

Since the beginning of the year, Netflix securities are down 0.47%. Over the past 12 months, they have lost 11%.

"Netflix's share buyback provides some answers as to what the company plans to do after receiving a breakup fee for its deal with Warner Bros. Discovery. But it still doesn't fully reveal exactly where the company will reinvest the funds," said Ross Benes, senior analyst at Emarketer. He was quoted by Reuters as saying.

Netflix in February received compensation for the termination of the deal with Warner Bros. Discovery in the amount of $2.8 billion - this amount was paid to the company by Paramount Skydance, which now - instead of Netflix - signed an agreement to buy Warner Bros. Discovery for $110 billion.

41 of the 57 analysts covering the streaming giant's stock advise buying it, 15 advise holding it and only one advises selling it. The average target price set by Wall Street analysts for Netflix's stock - $115.67 apiece - suggests it's up more than 19%.

This article was AI-translated and verified by a human editor