Netlifx Logo

Merger of two giants: Netflix buys out Roku

ROKU stock is up 10% in recent days. This is due to rumors in the press. Curious tongues are whispering that Netflix may buy out streaming giant ROKU.

Rumors of mergers between large companies often circulate in the press. Whether or not the deal actually happens, such talk usually results in some stocks going down and others going up. The company they want to buy usually goes up. This happened with ROKU. But Netflix stock is not standing still, either. Its stock is up 2 percent since the beginning of this year. 

The merger of the two giants of the streaming business is big news for the media industry. The two companies have very different business models. ROKU, unlike Netflix, is focused on niche streaming markets. The company also pays a lot of attention to hardware. 

But Rich Greenfield, an expert at LightShed Partners, has a different opinion. He thinks Netlfix is unlikely to be interested in hardware because the company has already been through such a stage in its history. At one stage in its development Netflix was opening a DVD rental service. Now it is unlikely to decide to take a step back. 

JPMorgan spokesman Corey Carpenter believes that the cost of ROKU could cost Netflix unjustifiably. The current value of ROKU is estimated at about $14 billion. Plus the deal would require a premium on that value. According to experts, for that kind of money Netflix could create from scratch another new service or product and promote it. 

According to experts, the meaninglessness of this deal is due to another factor – it is the similarity of the main services. Both brands are engaged in streaming videos. In fact, many users use both brands’ services. Therefore, it is unlikely that the deal will bring a lot of profit Netflix. 

Previously, we wrote about stocks worth buying these days. If you’re interested in such stuff, see 17 undervalued Penny Stocks and 5 cheap stocks worth buying today. 

Leave a Reply

Your email address will not be published.