Ryuu96 said:
It's just a prediction, I still strongly doubt it, I don't think there's anything that points towards it and there's more than a few 'issues' 1. Microsoft has $107bn cash on hand, Netflix would likely cost around $180bn+ on the market when adding the premium, Microsoft would therefore either have to use stocks for the rest of the acquisition which isn't something they usually do, or rise a significant amount of extra cash, either way, a decent chance they blow through their entire cash in the bank. 2. Microsoft has never really expressed any desire in getting into this business and by that I mean the Hollywood/Film/TV business. They may want to expand since Xbox is their only consumer facing business but I feel like they are happy with that, I think they're happy with being a corporation first business, it's where they make all their money, I would be happy if that changed though, Lol. 3. Netflix's profit margins are way below Microsoft's which is probably an issue when you're acquiring a near $200bn company. Film/TV in general has slimmer profit margins than Games, for example, ABK Net Income in 2021 was $2.6bn in comparison to Netflix's $5.1bn but Netflix would cost more than $100bn extra to acquire. 4. It for those reasons is a bit of a risky investment, especially if other streaming services kick off, Netflix is great but also very lucky that they got in first. It might also be a factor to Microsoft who looking at Xbox loves owning their IPs, that a lot of Netflix's shows, they don't actually own the IPs for. You could say that Xbox has the IPs but few are proven in TV and already assigned elsewhere (Paramount, Amazon, etc). |
With high inflation, cash in the bank is better spent on property that make cash.
Doesn't matter if MS has express any desire, its not like they expressed any desire to purchase ABK or Bethedsa until it happen. Its more about opportunity and having the cash to do it more than anything else.
Not sure if the profit margin is the thing. Its the userbase that is the key, getting to 150 million users with GP is the goal and Netflix combined with GP gives MS the shot to obtain exactly that.
Betting your business on GP was already risky, either go all in and worry about consequences later of back off and be middle tier or worst. MS has a chance to be the # 1 streaming option and since they whole business is already geared towards that goal, Netflix makes sense if they are up for sale.
