3 Reasons Netflix Shouldn't Buy Roku

Rumors are swirling that Netflix (NASDAQ: NFLX) is looking to acquire Roku (NASDAQ: ROKU) after the latter closed the trading window for employees, prohibiting them from selling vested shares. Many investors are excited about the possibility of such an acquisition, and that sent the share price of Netflix higher alongside the bump in Roku shares from the expected premium an acquisition would require.

There are several good reasons for investors to like the prospect of Netflix acquiring Roku, but there are also a lot of good reasons it doesn't make sense. Here are three reasons that might deter Netflix from buying Roku.

Netflix CEO Reed Hastings surprised investors when he said the company is working on an ad-supported tier of the streaming service. Roku is one of the biggest connected-TV advertising businesses in the United States and has the advertising technology that could be applied to any market in the world.

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Source Fool.com