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Netflix may acquire Roku, according to internal rumours: report

Internal speculation at streaming hardware maker Roku suggests an acquisition is on the horizon, with sources pointing to streaming giant Netflix as the buyer – reports Markets Insider.

A senior Roku employee told the publication that a deal between the two streaming companies would “align well in terms of culture, business and current valuation” as Netflix would work on developing a video advertising company” and Roku has it.”

Much of the speculation has been sparked by Roku’s abrupt closing of its trading window, which is a period during which employees can sell their acquired Roku shares. This decision would suggest that important news is imminent.

News of the rumors sent Roku shares up more than 10% in the day. Historically, however, Roku has gone from a record market valuation of US$60 billion to around US$14 billion at the time of writing.

Roku’s fall makes it more affordable to buy for Netflix, which itself has lost more than 65% of its market valuation since the start of this year on the heels of slowing subscriber growth and its first quarterly loss. subscribers in over 10 years.

Netflix plans to launch a cheaper, ad-supported subscription tier this year. Roku’s video ad operations brought in $647 million in the first quarter of this year.

Acquiring Roku would allow the streamer to leverage the company’s already beefed-up ad network to build their own or simply integrate it into their own streaming platform to make things even faster and easier.

For Netflix, the agreement would be less about the acquisition of Roku than about its purchase return. Roku founder and CEO Anthony Woods originally worked at Netflix, developing a set-top box for the company before CEO Reed Hastings decided to scrap the project and Roku was created in 2008.