Video streaming platform Roku has seen its share price plunge more than 55% in 2022, before suddenly rebounding nearly 20% over market open on Tuesday as whispers of a Netflix acquisition make the industry rounds.
While Netflix is suffering through its own stock tumble dating back to November, reportedly Roku employees have discussed the possibility of being acquired by the market-leading streaming service in recent weeks, according to Business Insider. The embattled company saw its share price rise 10% Wednesday while Netflix’s stock price has risen 2%.
In response to recent chatter, Roku has reportedly halted the employee trading window, which prevents employees from selling vested stock. Traditionally, this strategy is employed shortly before a company makes an announcement that will impact their share price in order to circumvent potential insider trading.
Roku declined to comment on the reports. Netflix didn’t immediately respond to TheWrap’s request for comment.
Roku has grown to more than 60 million active users, but is still largely considered too small to compete with Google, Apple and Amazon in the streaming device marketplace. As a result, reports of a potential acquisition have followed the company since at least last year when Comcast CEO Brian Roberts reportedly weighed a potential purchase.
Roku devices aggregate a collection of apps and streaming services as well as offer its own original content — the bulk of which was acquired when the company purchased Quibi’s library. With experience in streaming advertisement technology, Netflix might view Roku as valuable infrastructure as it prepares to deliver its own ad-supported subscription tier by the end of this year.
However, the Roku and Netflix business models don’t appear to be seamless fits on the surface. Roku splits ad revenue with the various companies behind the apps and streaming services it houses. This would require Netflix to assume control of these relationships with rival studios.