Takeover Specs: Netflix

After announcing a rate hike that has subscribers jumping ship, Starz pulling it's content over a contract dispute, and the final death knell, the cutting of subscriber forecasts by the company itself, Netflix's (NFLX) stock has been more than cut in half. But is there any value left there? Jump past the break to find out.

Netflix (NFLX) $127.14

This chart of Netflix (NFLX) is enough to make any investor lose his lunch, especially if you own the stock, but now, in what I think is a smart move, they are spinning off the DVD Mail business and renaming it Qwikster. That's not where the real value is hear though. $6.68B is a pretty good deal for 21 million subscribers. This makes Netflix (NFLX) a prime take-over target for Amazon (AMZN), Google (GOOG), or Apple (AAPL). People were speculating on a takeover when the comapny was worth $12B so now the talk is really heating up. I usually don't like to spec on a stock just on takeover prospects, but Netflix (NFLX) has come down so much I think your downside hear is limited. They can probably get $180-$200 per share in a takeover bid. If it's gonna happen, it's gonna happen by the end of the year, so DEC 120 calls could be the way to play this. If you want to go 'super-spec' give the NOV 140's a peep.


This is not a recommendation to buy or sell any securities. DAK had no position in the company mentioned at time of publication but positions can change at anytime.