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Netflix (NFLX) Continues Higher as M&A Chatter Heats Up

December 13, 2011 8:03 AM EST
Netflix (Nasdaq: NFLX) is continuing to move higher Tuesday morning, following reports that it might be a hot M&A target.

According to Bloomberg, Verizon (NYSE: VZ) is said to be eying the streaming-movie-and-DVD-delivery giant , and is "very serious" about making an offer.

Bloomberg cited "veteran media banker" Porter Bibb, who said that Netflix will be sold by Easter, and carry a price of about $4.6 billion.

The deal wouldn't be unheard of or implausible; Verizon CEO Lowell McAdam recently commented at a UBS conference that Verizon was aiming to expand beyond its FiOS offering, and is looking at "all alternatives."

Maybe a takeover isn't the final solution as well; Netflix might simply seek an exclusive partnership to find further funding as it looks for broader global distribution. Besides Verizon, the NY Post cites other possible partners/acquirers as Amazon (Nasdaq: AMZN), Microsoft (Nasdaq: MSFT), and possibly Apple (Nasdaq: AAPL).

Netflix has also been said to seek deeper partnerships with studios, possibly in exchange for a stake in the company. But a partnership wouldn't be clean-cut, as other studios might charge more for content or might not even enter a deal if they feel Netflix is favoring one specific partner.

With Netflix having struck content deals worth about $3.5 billion, and bills coming up soon, look for more chatter in the coming weeks and months. Shares have fallen 75 percent since highs above $300 in July, bringing it's market cap to a more reasonable $4 billion level, much easier to swallow than $16 billion.

Shares of Netflix are up about 4.4 percent premarket Tuesday.


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