Roku Stock Jumps 20% On Rumors of Buyout by Netflix

After facing a Stock Price Drop of 55% this year, Roku Stock took a big bounce upwards on Roku Buyout Rumors

2022 has not been kind to Roku's stock price. But recent rumors according to Business Insider are circulating among Roku employees about a possible purchase by Netflix has their stock soaring. This was after another 10% drop earlier in the week.

The employee gossip has had one side effect. Roku halted internal sale of their stock to its employees amidst the sale to Netflix rumor. This is something that companies will typically do ahead of a pending merger.

Rumors of Roku Being Sold is Nothing New

While both Roku and Netflix both declined to comment publically on this latest rumor. There have been rumors of Roku selling their company in the past. But this time it may be different and here's why.

1. Recently in Febuary, Roku banned private channels that could be side loaded on their platform. This included many Adult Roku TV channels which were on Roku since almost the beggining. These channels were every bit as nice as adult channels on cable TV and satellite and were very popular.

2. Their undervalued stock price has made Roku much more attractive to possible buyers. Netflix has had its own share of stock issues with its recent subscriber loss.

3. The Roku Channel is a great source of free content. And would be a perfect addition to a Netflix free ad-supported streaming service. Netflix is reportedly considering launching a free ad-supported version and the addition of The Roku Channel would make it even more appealing.

Which Other Companies Would Benefit By Buying Roku?

Sony - This would be a good fit for Sony which no longer has any streaming service. Sony Vue had its own streaming service early on which included live cable TV channels but it was shut down after only a few years.

Purchasing Roku would give them a popular media streamer of thier own, to go along with their excellent gaming and television line of products.

Apple - With their own media streaming service AppleTV+ and their popular Apple TV streamer, it's doubtful they would purchase Roku.

Walmart - They also had their own streaming service Vudu, which they bought and now have sold it to Fandango. They also have their own low-cost branded in-house media payer that is based on Android called Onn. They also sell an Onn branded Roku TV.

Currently, Netflix probably has the most to gain by buying Roku and is the most likely big player to seamlessly integrate the Roku platform into their business model. Especially since they don't own their own media streamer.

Anthony Wood the CEO and inventor of Roku, actually purchased the first media streamer from Netflix early on when he helped develop the media streamer during the time he worked at Netflix.

Rumors come and go, and this latest rumor may be just another rumor. But recent events are giving more credibility to this rumor than those in the past. And with the current state of our economy, this could be enough of an incentive for a quick Roku sale.

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