Netflix stock rises on takeover rumors
PHYSICAL: 'Vague' acquisition talk boosts shares, sites say
By Danny King -- Video Business, 7/13/2009
JULY 13 | PHYSICAL: Netflix shares today rose to their highest price in more than two months on what financial publications such as Baron's and TheFlyOnTheWall.com say are rumors of a potential acquisition of the largest U.S. movie-rental service via mail.
Netflix stock increased 5.3% today to $42.19 a share, the company's highest closing price since May 6. Investor interest was spurred by "renewed takeover speculation," Baron's said, citing TheFlyOnTheWall.com. Netflix shares are up 41% this year, compared to a 14% increase for the Nasdaq Composite.
Netflix was thought to be an acquisition target of Amazon.com, the world's largest Internet retailer, about two years ago, though no offer was made, Baron's said.
Netflix shares jumped more than 50% between the beginning of the year and mid-April, after which Lazard Capital Markets analyst Barton Crockett initiated coverage with a "sell" rating and noted that its "Watch Instantly" video-streaming service might be slowed by competing services from Google's YouTube and the News Corp.- and NBC Universal-owned Hulu. The following week, Merrill Lynch's Nat Schindler said Netflix shares would likely tumble once the stock market takes into account that the company doesn't charge extra for the streaming service.
The stock, which topped the $50 level in late April, dropped below $38 a share last month before resuming its gains after it was upgraded by Wedbush Morgan analyst Michael Pachter.
