Netflix Stock Jumps on Verizon Buyout Rumor

Netflix Inc. has had its ups and downs over the past year. Why, earlier this year Netflix (NASDAQ: NFLX) was trading at $304.79 a share as the streaming video and DVD-by-mail subscription service company seemed to do no wrong. But then came a highly-publicized price hike controversy, which halted growth and sent the Netflix stock price tumbling.

Lately, it has seemed like Netflix stock was determined to find its bottom, trading near a 52-week low of $62.37.

But that was then and this is now -- and now has Netflix moving strongly into positive territory on Monday, up 5.7 percent, or $4.06, to $74.95 at 1:30 p.m. Eastern Time. The reason: Netflix shares are up sharply on speculation that Verizon Communications Inc. (NYSE: VZ) might buy the company to enter the streaming video business.

It has been widely speculated that Netflix is a target for buyout, and last week Reuters ran a story saying that Verizon wanted to enter the streaming video business. The story suggested that Verizon would launch its own stand-alone service to stream movies and TV shows over the Internet, directly competing with Netflix.

But then came a report from DealReporter, a subscription-based service, which says Verizon could buy Netflix, taking advantage of a relatively low market cap to get entry into streaming video with the industry leader.