Netflix plans acquisition of Lionsgate Studios after auction failures by Roku and Warner Bros. Discovery
The streaming giant Netflix, apparently, is reorienting its business strategy in the global market. The company demonstrates a clear transition from the organic construction of its growth to a model focused on the acquisition of other large companies.
This strategic change came to light with the recent decision by Roku’s board, which prioritized the interests of its shareholders by accepting an offer of US$160 per share from Fox, passing over Netflix’s proposal.
Earlier this year, Netflix had already been defeated in the competition to acquire Warner Bros. assets. Discovery, which ended up in the hands of Paramount Skydance.
Shares of Netflix (NFLX) registered great movement among investors this Tuesday, driven by news that indicates the streaming company’s possible interest in the film studio Lionsgate (LION) as a potential purchase target.
At the time of writing this content, NFLX’s share price showed a drop of close to 3%, while LION’s shares showed growth of approximately 8%.
Millions of investors follow these market movements closely, looking for the most talked about news in the retail scene.
Netflix considers purchasing Lionsgate, indicates market report
As found in a report by Semafor, which cited sources linked to the matter, Netflix is seeking to complete a major acquisition and is among the several media companies interested in the Lionsgate Studios group. However, to date, there has been no formal expression of interest.
The same report detailed that Netflix lost the dispute for the TV streaming platform Roku (ROKU) to Fox (FOX, FOXA) in a highly competitive process, which reinforces the change from its original tactic of expanding internally to growing through strategic purchases.
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Sources consulted by Semafor added that a potential merger between Netflix and Roku would likely face strict antitrust scrutiny. Additionally, Roku’s board acted in defense of shareholders, as Netflix’s offer was lower than the $160 per share proposed by Fox.
Tough dispute for Warner Bros. Discovery had participation from Netflix
In early 2024, Netflix lost the competition for Warner Bros. assets. Discovery (WBD) to Paramount Skydance (PSKY). This bidding “war” went on for several months, with the company led by David Ellison consistently submitting more advantageous offers.
Although both competitors had to overcome thorough antitrust scrutiny, it is widely accepted that Netflix’s bid to acquire Warner’s streaming and studio businesses failed due to the Ellison family’s strong ties to the Trump administration.
What do retail investors think about Netflix stock?
On the Stocktwits platform, retail investor sentiment towards NFLX shares remained mostly “pessimistic” in the last 24 hours, accompanied by a high volume of messages.
One user in the community expressed no disappointment with the outcome of the bidding for Roku, suggesting that the company is being prudent in avoiding paying excessive amounts.
NFLX shares have lost 16% this year and fallen 36% in the last twelve months, underperforming the S&P 500 index.
