A report that Verizon was considering purchasing lagging video subscription rental service Netflix, at least the online streaming component of Netflix, sent shares of Netflix soaring on Monday night.
But shares fell to close down 4 percent on Tuesday, perhaps based on newer reports contradicting DealReporter‘s (paywall) original claims that such a transaction was in the works.
Two people “close to the situation” said that Verizon had engaged in no such talks of an acquisition of Netflix, Bloomberg reported on Tuesday afternoon.
Another analyst told Bloomberg that Netflix was interested in purchasing the underdog successful kiosk rental company Redbox, backing up an earlier report from TechCrunch that such a collaboration was in the works.
But the most decisive comments against a Verizon-Netflix acquisition yet came from Michael Pacheter, an entertainment analyst at Wedbush Securities, who told TPM that such reports were “not credible at all.”
“Given that the stock was at over $300 nearly 5 months ago, I don’t think anybody but Amazon is as a credible suitor for Netflix,” Pachter told TPM via email. “I don’t think that [Netflix CEO] Reed Hastings will take an offer of anything under $200 a share.”
Currently, Netflix’s stock is hovering around $72 dollars a share, putting its overall market capitalization at $3.79 billion.
But as Pachter, who’s covered the Netflix saga extensively, told TPM: “Furthermore, I don’t think there’s a chance of Netflix is the seller at $100 a share. The board could not credibly accept an offer of $100.”
Pachter pointed to Verizon’s Wireless Android App store, unveiled in October, as evidence that the company was directing its money elsewhere (some $5 billion in cash flow, according to its third quarter earnings statement).
“There’s no prayer that they are going to do something very cautious, like they’re doing with their Amazon, I’m sorry Apple-like model, and then spend billions of dollars on Netflix,” Pachter said.
