(Netflix takeover article updated with analyst commentary and afternoon Netflix stock price.)
NEW YORK (
is spiking as rumors surface yet again that
is interested in acquiring the company.
These rumors have surfaced many times over the last several years in regards to Netflix, most recently in January. Each time analysts have dismissed the claims.
While anything is possible (note the
deal), Needham analyst Charles Wolf says it is unlikely.
"Amazon would not acquire Netflix for its by-mail business, which will eventually go away" he says. While Netflix has a terrific digital-streaming business, its library consists of mostly older films. It can't offer new releases as they are available because it is too expensive.
Amazon, itself, has a streaming pay-per-view service for new releases, and it doesn't seem like there is a barrier preventing Amazon to offer old movies, Wolf says. "So the company has little reason to buy Netflix."
Still, Netflix has been a successful growth story, adding 1.7 million subscribers during the first quarter, its biggest gain in its 11-year history.
The DVD-by-mail retailer had a stand-out first quarter, earning $32.3 million, or 59 cents a share, a 44% surge over $22.4 million, or 37 cents, in the year-ago period. Analysts were calling for earnings of 54 cents a share for Netflix.
Netflix revenue jumped 25% to $493.7 million from $444.5 million.
Shares of Netflix are gaining 6% to $105.74 in Wednesday morning trading.
-- Reported by Jeanine Poggi in New York.
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