Netflix, Inc. (NFLX): Takeover Prediction Was Wrong


Almost a year ago, CNBC Fast Money Contributors, Mike Murphy, Founder/CEO of Rosecliff Capital, Josh Brown, CEO of Ritholtz Wealth Management, Pete Najarian, Cofounder of TradeMONSTER and Simon Baker, CEO of Baker Ave Asset Management talked about their forecasts for companies like Netflix, Inc. (NASDAQ:NFLX), American International Group Inc (NYSE:AIG),  and others.

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In a CNBC segment in August, 2013, Mike Murphy said that Netflix might not remain as a stand-alone company and some big names might consider acquiring them within a year. It’s a year now from that prediction, which went in the opposite way. Netflix, Inc. (NASDAQ:NFLX) has established itself as a top online streaming company and even crossed 50 million subscribers mark recently. Since Murphy’s predictions, Netflix stock price has gone up by more than 70%.

“[…] I think Netflix will not be a standalone company within the next 12 months. I think somebody has to buy them. […] Within the next year I believe somebody will buy Netflix,” Murphy said in 2013.

He predicted $20 billion price tag for Netflix, if someone buys them. Netflix, Inc. (NASDAQ:NFLX) current valuation is more than $24 billion. Josh Brown said that Netflix should expand and sustain the customer traction to succeed. Netflix did exactly that and succeeded as one of the top streaming company worldwide.

Murphy talked about American International Group Inc (NYSE:AIG) stock. He rated AIG stock as ‘Buy’ and insisted that investors should hold on to it. But in the last one year, AIG stock went up by less than 10% and also settled the Crisis-Era suit with a $960 million payment.

Brown said that Anadarko Petroleum Corporation (NYSE:APC) stock was not cheaper compared to other companies in the space. So he suggested investors to avoid Anadarko stock. Since Brown’s prediction, Anadarko stock has dropped by more than 10% till January 2014. Anadarko had a very good start to 2014. In the first quarter, their stock price went up by more than 30% and its price targets keep increasing.

Najarian pointed out that MGM Resorts International (NYSE:MGM) is a good stock to buy and he predicted that it would cross $20 per share mark by January 2014. As he predicted, the MGM stock price went up to $25 per share in January (increase of around 40% since August 2013). MGM stock price is still hovering around $25 per share.

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