Netflix Stock Gets a Boost from Microsoft Acquisition Rumors
Netflix investors are apparently keen on the idea of a Microsoft takeover. How so? Following online chatter that Microsoft may be making a move to acquire the video streaming and DVD-by-mail rental service, shares of Netflix jumped by more than 13 percent. The spike in share price, which sits at $69.58 heading into the work week, comes less than a week after Netflix announced its Q3 financial results, which wasn't all that impressive to Wall Street.
In an attempt to trace the acquisition rumor back to its roots, Forbes says it likely began when Netflix CEO Reed Hastings stepped down from Microsoft's board of directors. After all, if Microsoft was truly contemplating a bid, it wouldn't want Hastings within earshot. Then again, there are a number of other reasons that could explain his stepping down, such as Microsoft's increasingly competitive position in the streaming media space with Xbox Live. It should also be noted that Hastings is on Facebook's board of directors, so it's not like he has a ton of free time on his hands in the first place.
It remains to be seen if Microsoft will actually go through with this, but if that's the plan, now might be the best time to strike a deal. Even after jumping 13 percent, Netflix stock is still well below its highest price in 2012, which hovered around $130 back in February. In addition, Microsoft has been aggressively pushing the Xbox 360 platform as a media centric entertainment device, not simply a game console, and Netflix's business model plays right into that.
In an attempt to trace the acquisition rumor back to its roots, Forbes says it likely began when Netflix CEO Reed Hastings stepped down from Microsoft's board of directors. After all, if Microsoft was truly contemplating a bid, it wouldn't want Hastings within earshot. Then again, there are a number of other reasons that could explain his stepping down, such as Microsoft's increasingly competitive position in the streaming media space with Xbox Live. It should also be noted that Hastings is on Facebook's board of directors, so it's not like he has a ton of free time on his hands in the first place.
It remains to be seen if Microsoft will actually go through with this, but if that's the plan, now might be the best time to strike a deal. Even after jumping 13 percent, Netflix stock is still well below its highest price in 2012, which hovered around $130 back in February. In addition, Microsoft has been aggressively pushing the Xbox 360 platform as a media centric entertainment device, not simply a game console, and Netflix's business model plays right into that.
