Three months ago, rumor had it that Netflix (NASDAQ: NFLX) was about to launch a buyout bid for Roku (NASDAQ: ROKU). Fueled by this chatter, Roku's stock price rose nearly 18% in three days. When the buyout talk faded out, Roku shares lost that gain and much more over the next three days.
But investors haven't stopped thinking about this idea. "Should Netflix buy Roku?" is still a popular search term, and for good reason. Let me show you why this merger idea keeps coming back -- and why it probably won't result in an actual deal anytime soon.
The two streaming companies have a lot in common, and they have worked together since before video streams were a thing. In fact, Roku started out as an internal division of Netflix, developing a device called the Netflix Player to move the brand-new digital videos from laptops to the living room TV. Matching Netflix's content expertise with Roku's media-viewing platform makes so much sense. They are the peanut butter and grape jelly of the video-streaming market. These companies belong together, so maybe Netflix should buy its smaller partner.
Source Fool.com