5 Words From Netflix’s Co-CEO Ted Sarandos That Suggest an Acquisition May Not Necessarily Be on the Horizon for the Streaming Giant Netflix (NASDAQ: NFLX) investors were disappointed with the company’s most recent earnings results.
Although the streaming giant continues to grow at a decent pace, it clearly isn’t enough to win over growth investors, especially with it projecting its growth rate to decline to 12% for the current quarter (down from 13%)
One opportunity for Netflix to reignite its growth could be via an acquisition. The streaming company failed to acquire assets from Warner Bros. Discovery earlier this year, but Netflix’s name continues to pop up in rumors.
Investors may be eagerly anticipating news of a deal, in the hopes that it can pave the next wave of growth for the business. But co-CEO Ted Sarandos appeared to have poured cold water on that, stating on the company’s earnings call that “we’re primarily builders, not buyers.” Why Netflix might not go the M&A route Sarandos made it clear on the company’s recent conference call that while Netflix may not necessarily be averse to pursuing mergers & acquisitions (M&A), it would have to make a lot of sense for the business to consider one: “Our track record is clear that we have a very high bar to do any big M&A.” CFO Spence Neumann also said, “we invest in the business both organically and opportunistically through M&A.” The key word there is opportunistically. When it pursued Warner Bros., Netflix had a great opportunity to acquire top assets and content, including HBO.