Netflix Spikes on Verizon Takeover Chatter (Update 2)

(Updated with additional background and stock price.)

NEW YORK (TheStreet) -- Netflix (NFLX) takeover chatter has resurfaced, this time with Verizon(VZ) being pegged as a possible acquirer.

Shares of Netflix are gaining 5% in afternoon trading to $74.62.

This comes after rumors emerged last week that Verizon is working to build its own video streaming service to compete with Netflix and that it is teaming up with Coinstar's(CSTR) Redbox to create the service.

Now DealReporter is saying that Verizon may actually partner with Netflix in order to enter the streaming business.

But Janney Capital Markets analyst Tony Wible finds a buyout unlikely. "Any buyer has to not only pay $4 billion for Netflix equity, but also has to pay another $4.5 billion for the content obligations that are likely debt. It is far cheaper to buy rights on your own than to buy Netflix. It is also far cheaper to buy Netflix's subscribers for $100 than to buy the company for almost $400 per subscriber."

On top of that, Netflix is losing money on streaming, and the brand has been tarnished, making an acquisition less desirable.

This isn't the first time Netflix has been the target of takeover chatter. In September, it was speculated that Amazon would purchase the company following the launch of the Kindle Fire and Netflix's announcement that it was separating its DVD and streaming businesses.

The belief was the e-commerce giant would purchase Netflix's streaming business only, but that idea was soon squelched when Netflix decided to cancel plans for Qwikster.**

-- Reported by Jeanine Poggi in New York

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