Roku shares up 12%: is Netflix interested in buying?

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is a News Reporter at Invezz covering the European, Asian and North America stock markets. Wajeeh has 5… read more.
on Jun 8, 2022
  • Insider report says Roku employees are hoping for a takeover bid from Netflix.
  • Roku Inc abruptly closed trading window for its employees on Wednesday.
  • Shares of the San Jose-headquartered company are up more than 10% today.

Shares of Roku Inc (NASDAQ: ROKU) are up more than 10% this morning on an Insider report that said its employees were hoping for a takeover bid from Netflix Inc (NASDAQ: NFLX).

Roku closed employee trading window

The internal chatter has been alive in recent weeks but inflated further on Wednesday after the San Jose-headquartered firm “abruptly” disabled employees from selling company stock.

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Typically, trading windows are closed when a business is about to release information that’s likely to significantly affect the share price. Simply put, it’s a common practice to circumvent insider trading.

If Netflix, indeed, moves to acquire Roku Inc, it could mean a lifeline for the Nasdaq-listed company that’s now down more than 75% from its all-time high in 2021. Both Netflix and Roku have made no comments on the Insider report.

LightShed analyst reacts to the rumours

Reacting to the rumours this morning, Rich Greenfield – co-founder of LightShed Partners – said the idea that Netflix would be interested in buying Roku Inc is “absurd”. Explaining why on CNBC’s “Squawk Box”, he noted:

Netflix owning hardware and basically prioritising one hardware, meaning themselves, over the thousands of devices that Netflix runs on, seems completely antithetical to everything that it’s built over the last twenty years.

He sees no reason why Netflix would want to spend billions on Roku for ad-revenue that’s not going to make more than 25% of its top-line. Salvation for the streaming giant, as per Greenfield, lies in producing quality content more consistently. NFLX is up roughly 4.0% today.

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