This week, Netflix shocked the entertainment industry by opting not to increase its offer for Warner Bros. Discovery, paving the way for Paramount Skydance to acquire the Hollywood studio.

At that moment, Netflix co-CEOs Ted Sarandos and Greg Peters expressed their commitment to financial prudence. Now, reporting from Bloomberg provides additional insights into why Netflix officials stepped away from a bidding contest that appeared to be in their favor last December. 

One reason is that the streaming behemoth’s investors seemed highly doubtful about the acquisition being a wise move — Netflix’s stock plummeted 30% after the deal was announced, while the news of its retreat caused Netflix shares to rise nearly 14%.

Additionally, Netflix’s resolve regarding the deal reportedly weakened after Paramount delivered a higher bid and showed readiness to continue with multiple rounds of bidding.

By the time Sarandos met with officials from the Trump administration on Thursday, he might have already made the choice to back down. Indeed, since President Donald Trump had previously cautioned him against overpaying, Sarandos reportedly remarked, “I took your advice.”

Meanwhile, employees at Warner Bros. are now concerned about significant layoffs at the studio and heightened conservative political influence on CNN.