Will Disney (DIS) buy Roku (ROKU)?

NYSE: DIS | Walt Disney Company (The) Common Stock News, Ratings, and Charts

DIS – Roku (NASDAQ:ROKU) didn’t have a problem spurring potential suitors when it was a lowly private company.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Roku (NASDAQ:ROKU) didn’t have a problem spurring potential suitors when it was a lowly private company, but now that it’s a successful market darling, it seems as if everybody is playing matchmaker. The Information argues that Roku would look good on the arm of Disney(NYSE:DIS)Walmart (NYSE:WMT), and possibly even AT&T (NYSE:T).

Smoking out suitors for Roku isn’t new. Needham analyst Laura Martin also played up Roku as a buyout candidate when she boosted her price target on the streaming video pioneer last week. It’s easy to see why media giants lacking a dominant platform for digital distribution want the top dog in this booming space, but why would Roku clock out when things are going so well? Let’s see why Disney, Walmart, and AT&T aren’t going to buy Roku.

Disney

The timing would be lousy for a Disney purchase of Roku. It just completed the largest acquisition in its history earlier today. It’s going to take some time and focus to work all of those juicy content assets it took in overnight into its bloodstream.

The closing of the Fox deal also means that Disney now has a controlling 60% stake in Hulu. Along with the highly anticipated launch of its Disney+ streaming service later this year, does Disney really need to own Roku? If Roku’s success is largely the result of its agnosticism — something that distinguishes it from the media giants with subsidized gadgetry — wouldn’t that end if it were owned by the company behind ESPN+, Disney+, and a majority stake in Hulu? Next.

Walmart

Walmart has spent so much money in pursuit of becoming dot-com chic. Jet.com and Flipkart are two of its largest buys, but it also purchased Vudu in 2010 to gain a foothold in digital video. It seemed to be mounting a bigger push this year before reportedly scaling back its efforts.

Walmart makes more sense as a potential buyer of Roku than Disney. It’s hungrier than Disney, and it has a history of cutting big checks to make up for lost time. A deal is still unlikely to happen, especially with Roku rolling. Shares of Roku have more than quadrupled since going public 18 months ago. It’s not bowing out of the publicly traded game without a huge payday, and that’s something that even a pay-to-be-cool addict like Walmart may be unwilling to do.

AT&T

The focus of The Information‘s article are Disney and Walmart, but it does also offer up AT&T as buyer. The telco giant is a long shot here given its burdensome debt load, but after its recent purchase of Time Warner, it’s easy to see why the parent company behind HBO and DirecTV would want Roku.

DirecTV is losing subscribers to its satellite television service at an alarming pace, and that’s where Roku — with its audience surging 40% to top 27 million over the past year — comes into play. WarnerMedia’s inevitable streaming service would get a leg up on the competition if it’s actively promoted through Roku’s operating system, but — again — this would also eat away at the platform’s advantage.

Let’s stop trying to sling Cupid arrows at Roku. You can’t fix — or fix up — what isn’t broken.

Rick Munarriz owns shares of AT&T, Disney, and Roku. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Roku. The Motley Fool has a disclosure policy.

 


Walt Disney Co. shares rose $0.12 (+0.11%) in after-hours trading Friday. Year-to-date, Walt Disney Company (The) (DIS - Get Rating) has declined -1.30%, versus a 12.23% rise in the benchmark S&P 500 index during the same period.

Walt Disney Company (The) (DIS - Get Rating) currently has a StockNews.com POWR Rating of B (Buy), and is ranked #4 of 16 stocks in the Entertainment – Sports & Theme Parks category.


This article is brought to you courtesy of The Motley Fool.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

NYSE: GPL | Great Panther Mining Limited Ordinary Shares (Canada) News, Ratings, and Charts

Best & Worst Performing Stock Industries for July 18, 2019

Led by ticker GPL, "Miners - Silver" was our best performing stock industry of the day, with a 5.96% gain.
NASDAQ: TEDU | Tarena International, Inc. News, Ratings, and Charts

Best & Worst Performing Small Cap Stocks for July 18, 2019

TEDU leads the way today as the best performing small cap stock, closing up 49.59%.
NYSE: GFI | Gold Fields Limited American Depositary Shares News, Ratings, and Charts

Best & Worst Performing Mid Cap Stocks for July 18, 2019

GFI leads the way today as the best performing mid cap stock, closing up 8.02%.
NYSE: PM | Philip Morris International Inc Common Stock News, Ratings, and Charts

Best & Worst Performing Large Cap Stocks for July 18, 2019

PM leads the way today as the best performing large cap stock, closing up 8.22%.
NYSE: PM | Philip Morris International Inc Common Stock News, Ratings, and Charts

Best & Worst Performing Mega Cap Stocks for July 18, 2019

PM leads the way today as the best performing mega cap stock, closing up 8.22%.

Read More Stories


More Walt Disney Company (The) Common Stock (DIS) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All DIS News
Page generated in 1.2991 seconds.