Microsoft is in empire expansion mode. Since the beginning of 2021, the company has announced the acquisition of 19 companies, with its largest being Activision-Blizzard for $69 billion. While this deal has yet to officially close, it’s still in the regulatory phase, Microsoft, according to one analyst, may already be involved in an even larger potential deal: The $88 billion (current market-cap) Netflix.
A senior analyst at Needham, Laura Martin, shared her thoughts with Yahoo! Finance on the matter, saying a recent agreement between the two companies could conceal a “hidden agenda.” One she believes could lead to Microsoft acquiring Netflix.
A recent agreement between Microsoft and Netflix would allow for Microsoft to deliver ads for Netflix’s ad-supported content. Martin finds this marriage odd, as she believes Netflix’s choosing of Microsoft as an ad partner would not likely be the best option. She says Microsoft is not as experienced in ad-tech as other tech firms.
So, according to Martin, Netflix’s “hidden agenda” with this deal is, in reality, an entry way for Netflix to possibly be courted by Microsoft for potential acquisition.
Microsoft has, as of the end of March, a reported $105 billion in cash. Cash that is losing value daily, due to inflation. This $105 billion could be more than enough to cover a $100 billion buyout of Netflix, with a 13.6% premium to its current market value.
As you may know, Netflix has been quickly expanding its own video gaming business (as has Microsoft). Over the past calendar year, the company acquired at least three gaming studios, and last year launched mobile gaming for its subscribers.
Could Microsoft acquire Netflix? Only time (and potentially, regulators) will tell.
Read more about the possible MSFT acquisition of NFLX, HERE
Or discover other potential opportunities in the video game industry, HERE