Netflix Jumps On Amazon Takeover rumour

Reed Hastings, Netflix CEO

Netflix (NFLX) shares are up 6.6% today on speculation that Amazon (AMZN) could buy the movie rental service.

Bloomberg: “There’s heavy call buying and the stock is up on renewed takeover talk, with Amazon being mentioned specifically,” said Fred Ruffy, the senior options strategist at, a New York-based provider of options market analysis. “It’s pretty typical of speculative call buying.”

This isn’t as strange a deal as it sounds: While Amazon and Netflix both operate in the DVD and digital movie businesses, their pricing models don’t really overlap. Amazon sells DVDs and offers digital movie rentals and purchases on an a la carte basis, while Netflix sells DVD and digital rental subscriptions.

Netflix has also been more successful than Amazon getting its digital movies distributed on more consumer electronics devices, though it’s still too early to call a winner there.

Netflix shares peaked around $50 in April and have since dropped about 20%.

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