Trump will weigh in on the Netflix-Warner Brothers merger. What’s the trade

Good on anyone who sniffed out the Warner Brothers sale last year as it’s been better than a 3x trade.

The upside is now limited to $27.75 per shares, which is what Netflix bid as part of the $72 billion equity deal plus debt. It’s a huge bid in a tough industry as Netflix tries to put its stamp on traditional media.

The downside in WBD is now considerable as Trump weighed in on potential anti-trust questions.

“I’ll be involved in that decision,” Trump said Sunday.

“They have a very big market share,” Trump said. “And when they have Warner Brothers, that share goes up a lot.”

Keep in mind that Trump is not friendly with Netflix founder Reid Hastings. For years, Hastings positioned himself as one of Trump’s most prominent corporate critics. He donated $7 million to a pro-Kamala Harris Super PAC and was a leading voice pressuring Joe Biden to step down to make way for a stronger candidate against Trump.

Since the election though, he has gone quiet but Trump surely hasn’t forgotten which side he was on. I don’t see any reason to chase a 6% merger arb here with an indeterminate timeline.

This article was written by Adam Button at investinglive.com.