Is Netflix going to be swallowed by a larger company looking for an over-the-top entrée?
Billionaire investor Carl Icahn suggested that would happen, after disclosing last week that he has accumulated a 10% stake in the Internet videostreaming company. News of Icahn’s investment gave the stock a Halloween sugar rush, with Netflix shares rising 14% on Oct. 31.
Netflix “should be consolidated, in my opinion,” Icahn said in an interview with Bloomberg TV, adding that the company could potentially be acquired by Amazon.com, Google, Microsoft or Verizon Communications. “I think that will happen,” he said, but added that there are no definite “plans or proposals.”
Asked for a comment on Icahn’s investment, a Netflix spokesman said: “We have many shareholders, now including Mr. Icahn, and we’re always open to their perspective on how to build on our success.”
In July 2011, Netflix shares topped $300. But they soon tumbled to less than one-third of that price after the company announced it would split DVD and streaming plans that September. As of Sept. 30 this year, Netflix had 25.1 million U.S. streaming customers and 4.3 million non-U.S. streaming subscribers.
Icahn’s interest in Netflix may be related to recent rumors that Microsoft is exploring a takeover of the company, Needham & Co. analyst Charles Wolf said in a research note.
Icahn said he acquired his stake in Netflix for an average of less than $60 per share.