Disney is reportedly eyeing up a Netflix takeover, according to a rumour circulating on Wall Street.
Analysts and investors believe the House of Mouse could shortly make an acquisition bid for Netflix, which would see two of the biggest media companies in the world merge. As a result, Netflix stock has risen above $100 per share, which highlights how much credence investors are lending to the rumours. The shares are currently trading at $102.34, which is a big leap up from the $85.99 price we saw back in July, and the recent $94.56 low on September 26.
A research note by Will Power, an analyst at Robert W. Baird & Co., reads: “Whether Disney, Apple or someone else, Netflix could become a target."
And speaking to Broadband TV News, CCS Insight analyst Paolo Piscatory said: “Netflix is global, an established and proven platform and available on a plethora of devices. This would be a goldmine for Disney given its growing presence in online video and represents a great channel for distributing the slew of Disney content around the world. Furthermore it offers plentiful opportunities to reach new audiences."
Disney bought Lucasfilm for $4 billion back in 2012
Ampere Analysis’ Guy Bisson is similarly confident that the pairing would work well: “Disney already has a strong relationship through exclusive content deals in the United States. Netflix has been increasing originals for kids recently, and kids content represents more than 10% of the library. Disney’s demographic has been moving to SVOD and tablet viewing faster than any other.”
But not everyone is convinced by the rumours:
"It’s very clear what the impact or Marvel, Pixar, and Lucasfilm has been on the House the Mouse built. Disney consistently leads the way on the box office charts with films from all three companies,” writes industry insider ‘The Entertainment Oracle’. “However, just because Disney can acquire a company doesn’t mean it should.”
He continues: “Reports have surfaced in the last few weeks about Disney’s rumoured interest in acquiring Twitter and Netflix. Personally, I see a Twitter deal happening long before Netflix just because the streaming company is so massive, but again just because something looks good doesn’t mean it is best for business.”
And speaking to Bloomberg, Drexel Hamilton’s Tony Wible said: “You’ve seen some takeover chatter popping up, but Netflix hasn’t shown it wants to be acquired.”
Netflix currently has a stock market value of $45.69 billion, which is far above the $6.78 billion in revenue the company turned over last year. By comparison, Disney has a market cap of $148.21 billion, and turned over $52.46 billion last year.
As of July this year, Netflix had over 83 million paid subscribers globally, of which 47 million were based in the US.
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