Share prices up 6% amid Redbox, Verizon rumors
Netflix shares spiked Monday on rumors that Verizon may be looking buy the netcaster, a week after reports that the telco might launch its own streaming service or hook up with Redbox.Netflix shares closed up $4.37, or 6.16%, at $75.25, standing out in a dour market roiled by European economic woes. Speculation on the combination appeared on a financial website and was echoed by analyst Porter Bibb on Bloomberg TV. “I am hearing rumblings from inside Verizon that they are very serious about either Netflix or something similar,” said Bibb, of Mediatech Capital Partners. Conventional wisdom has it is that Netflix founder and CEO Reed Hastings would never sell the company, which experienced years of explosive growth before recent strategic blunders drove away some 800,000 subs, jolted management and decimated the stock, which had been trading at over $300 a share. At a media conference last week, Verizon execs downplayed rumors that the company was planning jump into an increasingly crowded market and launch its own streaming service. The next day reports emerged that Verizon and DVD kiosk operator Redbox might team up. The heated speculation is a sign of feverish growth in the sector and the fact that Netflix may be perceived as vulnerable at this point. But Hastings said last week that he sees subscriber growth resuming next year. He also said he sees HBO Go as his biggest competitor since parent HBO is the only service that spends anything close to what Netflix does on programming.