Walt Disney Co. is on the prowl to acquire assets to add to its Goliath media and entertainment business; at least that’s the chatter on Wall Street.
Following reports last week Disney DIS, -0.40% was considering a bid for the floundering but pioneering social-media platform Twitter Inc. TWTR, +4.12% , the House of Mouse’s name was tied to interest in another buy: Netflix Inc. Shares of Netflix NFLX, +4.14% climbed 4.1% in active trade Monday following the rumors, which began Friday and carried over the weekend. Volume reached 15.3 million shares, about double the full-day average. A Netflix spokesman told MarketWatch the company doesn’t comment on rumors and declined to say anything further while the company is in a blackout period ahead of reporting earnings Oct. 17.
A spokeswoman for Disney wasn’t immediately available for comment.
The timing of a possible Netflix buy would be tough to call, according to R.W. Baird analyst William Power, who wrote in a note to clients Netflix has been the subject of “recent M&A rumors,” and “whether Disney, Apple or someone else, Netflix could become a target.”
Power rates Netflix shares neutral with a price target of $94, which is 8.4% below current levels.
For Disney—with its record for successful, high-profile acquisitions—some analysts say making a play for a company to move Disney further into streaming video, specifically its sports and ESPN content, makes perfect sense. Disney shares have underperformed this year, down 12% through Monday, while the Dow Jones Industrial Average DJIA, -0.30% has climbed 4.8%. The company’s film business has had a solid year, grossing more than $2 billion at the domestic box office so far and topping all other major Hollywood studios, and Disney successfully opened its $5.5 billion theme park and resort in Shanghai, China. But concerns over network ratings, cord-cutting and growth at ESPN has cast a shadow over the company.
Shares of Netflix have declined 10% in the year to date as investors remain wary of the company’s slowing subscriber growth.
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