Netflix Stock Drops, Lionsgate Jumps on Takeover Talks
Netflix may be trying to acquire Lionsgate after failing to obtain ownership of Roku and Warner bros. Discovery earlier this year.
Quick overview
- Netflix is reportedly interested in acquiring Lionsgate after failing to take over Warner Bros. Discovery.
- Lionsgate's stock rose by 9.32% on rumors of the acquisition, while Netflix's stock fell by 3.57%.
- Despite previously focusing on building their own media catalog, Netflix's potential acquisition of Lionsgate indicates a shift in strategy.
- If pursued, the acquisition could enhance Netflix's portfolio, which includes popular franchises like Hunger Games and John Wick.
Netflix (NFLX) failed to take over Warner Bros. Discovery, but they may have their sights set on Lionsgate (LION) now, according to circulating reports.
Liongate stock gained 9.32% Tuesday as rumors spread that Netflix may be interested in acquiring the film production and distribution company. The impact was very different for Netflix, and their stock dropped 3.57%.
There was no formal offer issued, but business website Semafor broke the news that the media streaming giant was interested. This should come as no surprise after Netflix failed to acquire Warner Bros. Discovery as well as Roku this year. Those entertainment companies were bought up by Paramount and Fox, respectively.
Is Netflix Focusing on Buying?
In the past, Netflix management stated that they were focused on building their media catalogue rather than outright buying it. That change in direction was evident a few years ago when they started heavily producing a number of hit shows, including Bridgerton, Wednesday, and Blacklist.
The message was clear- Netflix was working to build their own brand of entertainment that would rival whatever was being offered by other media companies. Their subscriber base grew, and their revenue jumped from quarter to quarter mostly steadily.
For their last quarter, the company reported earnings of $12.25 billion and a 16% increase from the previous year’s Q1. They managed that primarily through building their brand and focusing less on other companies’ properties. An attempt to buy Warner Bros. Discovery showed that they were thinking of massively increasing their back catalog and jumping into the theatrical release market in a big way.
That was what they attempted to do, but Paramount battled them for the acquisition and eventually won. Now, Netflix may be back with money in hand to buy Lionsgate. This would be a significantly smaller acquisition than Warner Bros. Discovery but still a notable one. Lionsgate owns the Hunger Games, John Wick, Twilight, and the Saw franchise, among many others.
Netflix stock is now priced at $78.74 per share, down from $89 a month ago and a 2026 peak of $107 in April. Even if Netflix makes a formal offer to Lionsgate, they may be in competition with several other interested parties, and there is no guarantee that they will make the top offer.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Related Articles
Sidebar rates
Related Posts
Save