Bull Session: Will Netflix buy Roku?
For streaming giants $Netflix(NFLX.US$ and Streaming equipment maker $Roku Inc(ROKU.US$ it's been a rough year. However, both companies have seen some relief after the rallies on Wednesday following a report that said the company is in talks to be acquired by Netflix. Can the roumor be true? Will Netflix buy Roku?
Both companies have very distinct business models:
Netflix provides entertainment services, including TV series, documentaries, feature films, and mobile games across various genres and languages. The platform is well-known for its original made TV series: 13 Reasons Why, Stranger Things, and House of Cards, etc. The list goes on.![]()
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Roku, on the other hand, is more hardware-focused. The company operates in two segments, TV streaming platform, and Roku player.
Companies can benefit from the merger with another company in hopes of business expansion and growth-boosting. However, companies involved in the M&A deal are also at risk of overpaying, inadequate synergies, or inability to integrate the two companies properly.
Analyst Opinion
As Netflix is arguably better served investing in content, Netflix has historically shied away from large M&A, and Roku is arguably better served to stay independent.
KeyBanc analyst Justin Patterson wrote in a research note that he is "skeptical" of a Netflix deal for Roku.
KeyBanc analyst Justin Patterson wrote in a research note that he is "skeptical" of a Netflix deal for Roku.
It's been a long time since the company offered its DVD rental business. Accordingly, taking a step back into the past doesn't seem like a smart or strategic move.
In a recent interview, Greenfield suggested Netflix is unlikely to wade into the hardware waters.
In a recent interview, Greenfield suggested Netflix is unlikely to wade into the hardware waters.
This deal would be massive in scope, probably requiring a significant premium to Roku's current valuation around $14 billion to get the deal done.
Said JPMorgan analyst Cory Carpenter.
Said JPMorgan analyst Cory Carpenter.
Potential outcomes could include:
• Netflix reaches a new deal with Roku to deepen cooperation instead of buying Roku as a whole.
• Netflix buys Roku, given the question that if the Board of Roku would effectively be willing to sell out near the bottom.
• Nothing happens. Netflix just walks away from the deal.
What's your thought on this rumor of M&A of Roku and Netflix?![]()
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Source: Investorplace, Dow Jones
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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SpyderCall : This headline about Netflix buying Roku came out yesterday very early in pre market. It started ripping in pre market so I got a call and killed it after only holding for like 30 minutes. But this buyout headline was just a rumor from the employees. They thought there could possibly be an acquisition or something because every employee received an email saying that they cant sell their Netflix shares until further notice. This could be for any reason but this does occasionally happen when a company is anticipating a merger. And again this is just a rumor from the employees so there is that buy the rumor sell the news aspect to this situation. But if this rumor is indeed fact then i don’t think anybody will sell this news. The only other factor that will stop Netflix from acquiring Roku is if it will develope a monopoly after the companies combine. I’m no expert but with all of the new competition that has developed in the video streaming sector there is much less of a chance of a monopoly than a couple years ago. But again I’m no expert. One thing to note is that after the merger their prices will converge slightly. Roku’s price will come closer to Netflix’s price. Or Netflix’s price will come down closer to Roku’s price. Or they will both come closer to each other. But it the broader market is rallying when this news hits then they should both climb. Either way when this news hits I will be bullish on both equities. Especially Roku.
Join✅Discord : Ya okay
KingNY-Life : It is impossible to acquire
SirKennethM : $Redbox Entertainment (RDBX.US)$ Redbox could always be bought by $Roku Inc (ROKU.US)$ It's what's best for business...