On a day when the stock market is generally down 2%, Netflix’s stock is actually soaring. The rental service’s shares shot up 6.8%, a big difference considering that its market value has been steadily declining for the past few months due to some stupid decisions. What is causing the increase? DealReporter thinks that Verizon is considering purchasing the ailing company.
While there is no hard evidence to support the claim, it is certainly within the realm of possibility. Just last week, we heard that Verizon had plans to start their own streaming service for movies and TV series. While there are also rumors that Verizon is working with Coinstar’s Redbox and is planning to launch as soon as May 28, 2012, there’s no reason why Verizon couldn’t be exploring all its options.
Analysts, however, question whether buying Netflix would be a good deal. The service is worth $4 billion — $4.5 billion when you factor in Netflix’s commitment to continue licensing new content. It might be cheaper to lure away Netflix’s subscribers than attempt to buy them. Fans of the company may be optimistic about this because takeover rumors are “the simplest and easiest way to say, ‘maybe the stock has bottomed,'” according to Janney Montgomery Scott analyst Tony Wible.
Personally, I don’t care who owns Netflix as long as they step up their game when it comes to new content. Losing the Starz catalogue is going to be a major hit to Netflix’s library, no how little they say it is being watched. If a buyout from Verizon means more things to watch, I’m all for it.
[Via Deadline]
