Are the movies back?Are the movies back?
Shares for the film production company Lionsgate**** soared on Tuesday**** following rumors of a potential buyout. According to a person familiar with the possible merger and acquisitions deal, streaming giant Netflix is one of the companies that may be interested in buying Lionsgate Studios, per reporting by Semafor.
- With the box office running only slightly behind where it was in the high-water mark year of 2019, there’s been renewed interest in stocks that have been exposed to movie distribution and production.
- All eyes have been on the attempted acquisition of Warner Bros. Discoveryby Paramount, which follows Paramount’s own acquisition by David Ellison backed by his Oracle-owning father, Larry Ellision.
- Meanwhile, IMAX stock closed at a record high yesterday thanks in part to blockbuster numbers coming out of early screening sales for Christopher Nolan’s “The Odyssey.”
- Many exhibitor and studio stocks were dead money during and immediately following the pandemic, buoyed if at all by the direct-to-consumer streaming businesses that occasionally offered investors glimmers of interest.
Neither Lionsgate nor Netflix confirmed the news, but nevertheless the stock climbed, closing up 14%.
The Takeaway
Netflix closed lower on news that Fox will acquire Roku in an approximately $22 billion deal after it was also**** rumored that the streaming company was interested in that acquisition. “Netflix did not make a bid for Roku,” a spokesperson told Semafor. This comes after Netflix withdrew its buyout bid for Warner Bros. earlier this year.
Lionsgate’s shares are up 77% since January. Lionsgate owns massive franchises like “John Wick” and “The Hunger Games.” The film company has a market cap of approximately $4.7 billion, making it roughly 5x smaller than Roku and 13x smaller than Warner Bros.