On Wednesday, June 8, shares of streaming operator Roku rose, after the publication of a Business Insider report in which employees speculated about the acquisition of Netflix.
According to reports, with the rumors of the purchase, Roku prevented its employees from selling the acquired shares in the company.
The streaming giant has been diving into the advertising model that Roku has been promoting for years. Roku’s ad platform generated 647 million in revenue in the first quarter of 2022, seven times more than it did in hardware sales.
If true, this Netflix purchase will help Roku increase its reach outside the US. As Roku has 61.3 million active users while Netflix has a global audience of 221.6 million members.
With this, Netflix will also inherit a catalog of original content that can be streamed to a wider audience.
Another reason could be that both companies have fallen out of favor as they are trading more than 70% below last year’s highs and with each company’s deal, the rumor may be used as an exciting move to get Wall Street excited again.
A senior executive at the operator told Insider that the deal “will align well in terms of culture, business and current valuation” as Netflix wants to enter the advertising space and its potential partner “owns”. HBO and Disney compete for a competitive advantage.
If true, then Roku’s founding CEO, Anthony Wood, will return to Netflix, a company he worked for for 15 years and developed a streaming device.
Main news source: USA Today.
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