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Netflix Stock Increases Upon Microsoft Buyout Rumor

Wall Street is full of whispers this morning with rumors Microsoft is planning a buyout deal for video streaming giant Netflix. Thus far it’s an unconfirmed rumor that has only caused shares of Netflix to suddenly spike by 13-percent.


Microsoft

Netflix Boss Reed Hastings recently abandoned his position with the Microsoft board, which leads Forbes to believe may very well be an indicator that this rumor could be a little-bit more serious than slight gossip around the tech atmosphere. Needless to say, Microsoft denied to comment on the situation.

This Netflix investment would offer Microsoft management of a streaming service that could be used to contend above the level of Amazon’s streaming video service. It may also provide Microsoft with adequate materials to compete with Google and Apple within the tablet and smartphone market.

Netflix’s recent quarterly report left stockholders gazing in confusion. They failed to meet their projected amount of subscribers for the quarter, falling short by 0.4 million. Earlier in the year, Netflix projected 7.0 million subscribers would join Netflix in 2012, however the figure ha dropped to near 5.4 million due to this past quarter.

With $69 billion store away in Microsoft’s vault, snatching Netflix wouldn’t put an excessive dent on the company’s wallet. After all, Microsoft’s market cap is sitting at $3.7 billion!

Source: CNET

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