A new report suggests activist investor Carl Icahn plans to use his new 10% stake in Netflix to engineer a sale of the streaming-video company and other shareholders would join him in his efforts.
At the same time, Barclays writes CEO Reed Hastings is expected to be resistant.
Potential buyers include Google, Amazon, Verizon and Microsoft, according to the Wall Street firm. The first three could use it to augment current online video plays. Microsoft might gain a foothold in the business, while strengthening efforts to turn the Xbox into a media hub.
Barclays writes that increased competition from Amazon and Verizon/Redbox and rising content costs might persuade shareholders to get on board with Icahn’s move. Netflix recently reported that it was likely to miss its previous guidance of reaching 28.7 million U.S. streaming customers by the end of the year.
Netflix believes Hulu is its most prominent U.S. competitor. Hulu has an advantage with its ownership (NBCUniversal, News Corp. and Disney) and is likely to keep its content pipeline flowing.
Barclays did write that it is “skeptical that a buyer would find more value in purchasing Netflix than building a content offering organically.” Also, it suggested an Amazon or Verizon might find the value of Netflix more in how it could bolster e-commerce or hardware sales.
Hastings owns less than 2% of the company’s shares, so Barclays says that further opens the door for Icahn to make a move. Netflix shares soared Wednesday on word of Icahn’s stake, but saw a slight dip in midday trading Thursday.