Netflix, Inc. A Good Acquisition Target For Apple Inc. Or Amazon?

Netflix 7 How to Hacks

Netflix, Inc. (NASDAQ:NFLX) stock, which has been a top pick for investors, is now no more a favorite. Last year, the video streaming company was the best performer on the S&P 500, gaining 298%. However, after hitting an all time high of $458 on March 6, the shares of the company have lost almost 18% or $83. In last 21 trading sessions, Netflix has closed lower 18 times.

Apple, Amazon to blame

Experts and analysts have been wondering over the possible reasons for such a sharp decline. However, Chad Morganlander of Washington Crossing Advisors believes the decline is more to do with rivals Apple inc. (NASDAQ:AAPL) and Amazon, according to a report from Yahoo Finance.

Trust over Netflix, Inc. (NASDAQ:NFLX) was shaken on Monday, following a report claiming that Apple is in talks with Comcast over a possible internet-based streaming service. Comcast is the parent company for NBCUniversal.

So, it is feared that entry of new players in the market would make it tough for Netflix to survive. But, Morganlander believes “that it’s going to be a lot harder for them [the competition] to get into this business.”

On the future prospects of Netflix, Inc. (NASDAQ:NFLX), Morganlander believe that the company could a potential acquisition target, saying “Wouldn’t it be better for Apple to acquire this company or Amazon to acquire this company?”

Morganlander has a price target of $450 on Netflix.

Netflix volatile of-late

After the reports on Apple –Comcast deal, Netflix shares were down about 7.3%, making it the worst performer on benchmark S&P 500 index that day. Including the decline, the shares were up only 2.6% year to date compared to over 24% at the start of March. Monday’s performance was the second worst performance after the 9.2% decline on Oct. 22, when activist investor Carl Icahn announced of lowering a stake in the video streaming firm. However, despite Monday’s sell off, Netflix, Inc. (NASDAQ:NFLX) shares are up more than 300% since the end of 2012 versus 30% for the S&P 500.

On Wednesday, Netflix, Inc. (NASDAQ:NFLX) shares closed at $372.28, up 0.39%.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com

5 Comments on "Netflix, Inc. A Good Acquisition Target For Apple Inc. Or Amazon?"

  1. Netflix, Inc. is an Internet television network with more than 33 million members in over 40 countries.

  2. Netflix is one of the first
    companies that successfully adapted its business model to the switch from
    traditional to digital media. Today, it is a major internet TV provider in the
    US, and, with its share price up 285% year to date, ranks as 2013’s hottest
    momentum stock.

  3. Netflix is a house of cards. Does not own anything but rented content. From tech point and image quality no one can come close to Apple from market standpoint Comcast will give Apple the audience on TV side but other platforms are dominated by Apple so I do not see why Apple will buy Netflix.

  4. What a stupid piece of journalism!!

  5. And John Candy is Dead, Besides lest see this though the end of your logic, then Google Buys TWX, so what does APPLE do with its investment then?

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