Netflix, Inc. (NASDAQ:NFLX) Icahn says considering hostile takeover

Earlier this shares in video streaming services provider Netflix rose on hopes that the company would be a target for acquisition. Names like that of Amazon and Microsoft have cropped up as prospective buyers.

Investor Carl Icahn, who recently picked up a 10 percent stake in the company, added fuel to the fire saying that he was considering a hostile takeover of the company.

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He however added the rider that h was uncertain if he stood any chance of acquiring it.

In an interview to television network CNBC, Icahn said, (in response to a question about a hostile purchase of Netflix), "The thought had certainly entered my mind. I have to admit I think about it, but we haven't made that decision."

Icahn was quick to add that his valuation of Netflix for an acquisition would be much lower than a buyer who would be looking to buy the company to add synergies and acquiring its vast library of content.

Last month, in a regulatory filing activist investor Icahn had revealed that he had acquired 9.8 percent stake in Netflix.

Most of his purchases were in the form of call options that expire in September 2014. The billionaire, who is known for shaking up corporate management, has said Netflix was undervalued and an attractive acquisition target for a number of companies, a Reuters report said.

Netflix, as a defensive measure, has adopted a poison pill strategy to prevent a hostile takeover by an outsider who lacks board approval.

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Netflix, Inc.(NASDAQ:NFLX) Defends itself via Poison Pill

Netflix, Inc.(NASDAQ:NFLX) has resorted to a shareholder rights plan or poison pill, as it revealed on Monday, to protect itself from a corporate acquisition by Carl C. Icahn. This is the company’s very first method of defense right after the announcement made by Mr. Icahn that he had purchased a 9.98% stake in Netflix.

The company stated that the board of directors has concluded the takeover is not in the best interests of Netflix and its stockholders, which is why they have come up with the plan to safeguard both the organization and of course, its shareholders. Thanks to the poison pill, it will cost Mr. Icahn an astronomical amount to compile more shares.

This is how it works – one right for every common share is being granted. One right allows a shareholder to purchase one-thousandth of a new preferred share at the exercise price of $350 per right. Now, here is the catch: the rights are valid only after an investor manages to gain 10% of the company without any approval from the board of directors. 20% shares can be acquired by institutional investors. The expiration date for the rights plan is on 2^nd November, 2015.

Netflix has further elaborated about what happens after 10% or 20% common stock is purchased. After the acquisition, Netflix merges into another organization, an acquiring entity merges into Netflix or Netflix sells or transfers more than 50 percent of its assets, cash flow or earning power, then each right will entitle the holder thereof to purchase, for the exercise price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the exercise price.. Thus the acquiring person is not granted the authority to make use of the rights.

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Netflix, Inc. (NASDAQ:NFLX) Up 11.50% As Towering Online Revenue Boosts US Home Video Spending – CSTR

Fast growing Internet services like Netflix, Inc.(NASDAQ:NFLX), DVD rentals and online movie purchases from Redbox kiosks lifted US home-video spending in the third quarter, countering the unrelenting drop in DVD sales.

The industry-backed Digital Entertainment Group said in an e-mailed statement that total sales increased 0.2% to $3.94 billion. Revenue coming from subscription streaming has more than doubled while online purchases of TV shows and movies increased almost 38%.

Hollywood studios are relying on digital pays and services like Hulu Plus to boost revenue and replace dwindling DVD spending as more customers watch videos online from TVs and smaller devices. Sales increased 1% year to date to $12.3 billion, according to the association.

President of Warner home Video, Ron Sanders said in an interview that the growth businesses are all growing continuously every month. They are apparently beginning to counterbalance the downturn that was previously seen.

The major studios and electronic companies are supporting Ultra Violet, a service to allow customers a TV show and a film and watch from an array of Web-linked devices. Studios are working to lure more retailers to take part in the service, as told by the president of Sony Pictures Home Entertainment, David Bishop.

Bishop mentioned in an interview that Sony Pictures is on the verge of increasing the retail base. It requires more in the market and it will aid the ownership concept among consumers.

Warner Bros. announced recently a contract to provide films to Redbox Instant and Verizon Communications. It was last month when pay television channel Epix got a deal to sell and rent movies through Amazon Prime service.

Sales from subscription streaming soared to $579.2 million in the third quarter, as per DEG. Sales of electronic copies of TV shows and movies increased to $187.1 million. Sales of physical disks dropped 4% to $1.67 billion for the quarter.

Shares of Netflix, Inc.(NASDAQ:NFLX) has been showing solid buying recovery and rose 11.35% to $68.42. Earlier this week, the stock fell 14% in a single day after reporting lackluster outlook. Shares of NFLX got boosted on rumors that Microsoft Corporation(NASDAQ:MSFT) Still Interested in Acquiring Netflix

 Coinstar, Inc.(NASDAQ:CSTR) shares soared 4% to $44.97.

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Tech Gainers & Losers: Netflix, Inc. (NASDAQ:NFLX), Facebook Inc (NASDAQ:FB), Yelp Inc (NYSE:YELP)

Netflix, Inc.(NASDAQ:NFLX) shares are beaten down by 15% in the opening session  as the company once again spooked investors by trimming its subscribers addition target for the year after the company reported that it added 1.2 million net streaming subscribers in the U.S., near to its lower end target of 1 million to 1.8 million.

The company which has been struggling to gain confidence after last year’s pricing mess, said that now it expects to add 4.7 million and 5.4 million U.S. streaming subscriber this year, well below from its past guidance of 7 million domestic streaming subscribers.

Growing streaming subscribers in the U.S. is crucial to Netflix because the number of DVD-by-mail subscribers continues to fall and its losses internationally are mounting. Last week, it added streaming service in Sweden, Denmark, Norway and Finland.

However, the company reported above estimates earnings with EPS of 13 cents on revenue of $905.1 million compared to analysts’ target of 8 cents on revenue of $905 million.

Facebook Inc(NASDAQ:FB) shares soared 22% as the company has finally laid to rest the fears of those who were doubting the ability of the company to monetize its mobile subscriber base.

The company on Tuesday announced its quarterly results which showed that advertising revenues from mobile devices rose faster than expected and now contributes about 14 percent to its overall ad revenues.

This translates into revenues of $150 million in absolute numbers, a big jump from the $40 million to $50 million in the second quarter while in the first quarter it was zero.

Founder and Chief executive Mark Zuckerberg said that mobile was the most misunderstood part of the company.

Yelp Inc(NYSE:YELP) also jumped 12.30% in the opening session in Wednesday’s session after the company pre announced its revenue for the third quarter, which topped analysts’ target.

The company projects top report revenue of $36.4 million in its Nov. 1 earnings announcement, ahead of analysts’ estimate of $35.8 million.

Separately, the company announced to acquire Qype, Europe's largest local reviews site, in a cash-and-stock deal worth about $50 million. Tom White of Macquarie said the deal "should help Yelp accelerate its expansion into Europe" in a note to clients.

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Netflix, Inc. (NASDAQ:NFLX) shares plunge on renewed concerns over its growth prospects

Netflix, Inc.(NASDAQ:NFLX) shares have been having a hard time at the bourses. After rising about a third over four trading sessions, the stock plummeted 11 percent on Tuesday on renewed concerns about the company's growth and its ability to get quality content at reasonable prices.

One of the main challenges for the company that provides video streaming content and DVDs on rental basis is the acquisition of content from content providers and keep its costs low.

After a Citigroup survey last week which showed that customer satisfaction with Netflix had improved in the third quarter, sentiments about the stock had been upbeat.

However on Tuesday, Bank of America Merrill Lynch downgraded the stock, which dampened sentiments.

It is the conflicting opinions among various brokerages that has led to volatility in the stock and confused investors.

"It has become a real battleground stock," Nick Gibbons of Gradient Analytics told AP. Gradient is a research firm that has a dim view of Netflix's prospects.

Apart from the rising cost of content from original content providers, Netflix is also facing competition from other entrants such as Amazon.

Netflix is also yet to recover from a steep increase in its prices last year that alienated many subscribers. In August its chief executive defended the acquiring content at a higher price saying that the higher costs justified the good quality content that it was getting.

Shares in Netflix fell $7.99 to $65.53 at the close of trading.

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3 Tech Winners: Sprint Nextel Corporation, Netflix, Vringo (NYSE:S, NFLX, VRNG)

Sprint Nextel Corporation(NYSE:S) shares recovering from yesterday’s sharp loss. Today’s rally came in despite the fact that Deutsche Telekom AG (DTE) is all set to merge with its T-Mobile USA division with MetroPCS (PCS) Communications Inc., which means Sprint Nextel is behind now.

While Sprint Chief Executive Officer Dan Hesse has said the third-largest U.S. mobile-phone carrier will play a role in industry consolidation, Stifel Financial Corp. says a tie-up between MetroPCS and T-Mobile USA will limit Sprint’s takeover options.

Will Sprint Continue To Move Higher And Hit $10 This Year? Find Out Here

Sprint is trading at a 58 percent discount to sales, the lowest in the group, according to data compiled by Bloomberg.

While Sprint won’t be forced to immediately do a deal, it could still try to merge with T-Mobile USA or buy spectrum from Dish Network Corp. (DISH) or Verizon Wireless, said Piper Jaffray Cos.

Shares of Sprint are up 6.50% to $5.22.

Netflix, Inc.(NASDAQ:NFLX) is another stock which is showing some relief after the slump in the past one year, which had wiped out the company’s 50% market cap.

Today’s 9% rally after analyst at Citi issued a note to its clients stating that overall customer satisfaction with Netflix has started to show sign of recovery for the first time since last summer, while adding that the company's competitive position as an online video destination continues to tough. The firm further noted about the improving churn propensity and improvement in perceived streaming content selection as reasons for the buy rating.

Shares of NFLX jumped 9.50%.

Vringo, Inc.(NYSEAMEX:VRNG) is the stock of the day as it soared 30% to $4, its highest level since late July, 2012.

This morning, the company got positive news from a federal judge related to its ongoing patent fight with Google. The judge concluded that at this moment no summary can be issued related to case. After today’s judgment, Vringo has cleared one of the last hurdles that could have stopped the company from going to trial Oct. 16.

Will VRNG Hit $5 Before The case Date? Find Out here

The judge has further ordered that the parties engage in settlement discussions between United States magistrate, Judge Lawrence R. Leonard at 10:30am, Tuesday October 9, 2012. There are other talks scheduled to take place on October 5th.

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