Share value in Netflix rose more than 13 percent on Friday following a rumor that Microsoft was interested in purchasing the streaming video and DVD-by-mail outfit. Netflix will open on Monday at $69.58 per share, a much-needed boost considering it has been trading at almost half of its previous year high in recent weeks.
Forbes believes the latest rumor stems from the fact that Netflix CEO Reed Hastings recently stepped away from his position on Microsoft’s board of directors. If Microsoft is indeed thinking of making a bid, it’s quickly evident how having Hastings on the board would complicate matters.
Of course, that’s pure speculation at this point as there could be a number of other reasons why Hastings stepped down from Redmond’s board. For one, he’s an extremely busy man. In addition to his duties as Netflix CEO, he also serves on the board of directors at Facebook. Maybe he just wants a little extra free time.
It’s also entirely plausible that Netflix is feeling competitive pressure from Xbox Live. Microsoft has been making serious strides to transform the console from a pure gaming system into a digital hub for all things entertainment.
There appears to be no better time than the present for Microsoft to make a bid, even considering the 13 percent share value increase. Save for a brief stint in July, Netflix stock value has seen a steady decline since reaching a one-year high of nearly $130 back in early February. Even that figure is significantly less than what it was trading at during its heyday in July 2010 where the stock nearly hit $300.