Netflix, Inc. (NASDAQ:NFLX) may have no option but to be acquired by the likes of Alibaba Group Holding Ltd (NYSE:BABA) or Yahoo! Inc. (NASDAQ:YHOO), Porter Bibb, Mediatech Capital Partners managing partner, told Betty Liu in a discussion on Bloomberg’s Before The Bell.
The comment about Netflix, Inc. (NASDAQ:NFLX), Alibaba Group Holding Ltd (NYSE:BABA) and Yahoo! Inc. (NASDAQ:YHOO) was made by the executive while he and Liu were discussing the repercussions of the entry of Home Box Office Inc. and CBS Corporation (NYSE:CBS) into the content streaming industry.
“Netflix came down – it was 150 P/E two days ago, it’s 100 [P/E] today – [but]it’s still very, very vital. It has 50 million subscribers and I think it’s an acquisition target. I wouldn’t be shocked if Alibaba or even Yahoo stepped up and instantly bought it,” Bibb said.
The comment came as Liu asked Bibb whether Netflix, Inc. (NASDAQ:NFLX) is recommended to be sold by investors. When Bibb said it is not because it is a possible acquisition target, Liu asked whether Reed Hastings, the company’s founder and leader, will be willing to sell to Yahoo! Inc. (NASDAQ:YHOO) or Alibaba Group Holding Ltd (NYSE:BABA).
Bibb said that Hastings may not have a choice. He pointed out that the company has a burgeoning liability on its balance sheets that is putting pressure on the company. Couple this with the ongoing content acquisition of the company which costs a lot of capital and Hastings may be forced to sell to another company like Alibaba Group Holding Ltd (NYSE:BABA), Bibb said.Meanwhile, CBS Corporation (NYSE:CBS) will attract customers with its streaming service, Bibb said, while not the same can be said of a similar service from Home Box Office Inc.
Andreas Halvorsen’s Viking Global is a Netflix, Inc. (NASDAQ:NFLX) investor. The firm reported owning about 1.32 million shares in the company by June 30. Also by the end of the second quarter, David E. Shaw’s D.E. Shaw & Co., L.P. reported owning about 16.19 million Yahoo! Inc. (NASDAQ:YHOO) shares.