Report: Verizon Mulling Netflix Buy
Shares of Netflix (NASDAQ:NFLX) soared more than 6% Monday on a report that Verizon Communications (NYSE:VZ) is considering buying the troubled movie renter.
Verizon is reportedly evaluating whether a purchase of Netflix could provide an entry into the video delivery business, DealReporter said, citing a source close to the matter.
A Verizon spokesman declined to comment on the report. Netflix said it does not comment on "rumors or speculation."
The news comes as Netflix continues to struggle from a series of missteps earlier this year when it raised subscription prices and separated its DVD-by-mail service and streaming.
Netflix’s stock price plunged to a new 52-week low two weeks ago when the company warned it would fall to a loss in 2012 if it failed to boost its bruised customer base.
The company has made several moves over the last few months in an effort to cut down on costs to alleviate its squeezed operating margins, including announcing plans to postpone expanding into new international markets.
Verizon, meanwhile, has tackled the phone, Internet, wireless and data areas, but has yet to launch into the movie-streaming business. Netflix would provide the company with more than 23 million movie delivery customers.