Netflix Investors Cheer Decision to Drop Warner Bros. Fight (1)

Netflix Inc. just won by losing.

Shares of the streaming industry leader rose as much as 12% in New York Friday after the company announced it was dropping out of the fight to buy Warner Bros. Discovery Inc.

The decision prompted a sigh of relief from investors who worried that Netflix, a company that rewrote the rules of movies and TV, would end up overpaying billions of dollars to become another me-too Hollywood studio — even if that studio owned coveted film and TV franchises like Batman and Game of Thrones.

The Netflix announcement came shortly after Warner Bros.’ ...