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Cuban buying Netflix stock, saying it will be acquired

🕐 2 min read

James Callan (c) 2014, Bloomberg News. NEW YORK — Mark Cuban, the billionaire owner of the Dallas Mavericks, said he’s buying shares of Netflix because the online-streaming service will probably be acquired.

“I’m buying NFLX stock,” Cuban tweeted Friday. “At half of YHOO, 10B<Twitter and small pct of major media companies, someone will try to buy them.”

Cuban, 56, is buying a stock that is trading near its lowest level in five months after slumping more than 20 percent in two days. The shares tumbled yesterday after Netflix reported a slowdown in third-quarter suscriber growth, blaming a recent $1 price increase for new customers. Cuban told CNBC today he added 50,000 Netflix shares, though he said he wasn’t sure what his total stake in the company is.

The Los Gatos, California-based company, a leader in online streaming with shows such as “Orange Is the New Black,” has a market value of $21 billion, compared with $30.5 billion for micro-blogging site Twitter Inc. and $39 billion for Yahoo Inc.

Cuban’s riches come from the media business. He sold, a multimedia Web service he founded, to Yahoo for $4.7 billion in 1999. He’s a regular on the investor-themed reality show “Shark Tank.”

Cuban didn’t immediately respond to an email seeking comment. Anne Marie Squeo, a spokeswoman for Netflix, declined to comment.

Cuban followed up on his original tweet by responding to a Twitter user asking whether companies would think twice before buying Netflix because of its off-balance-sheet liabilities. The company reported $8.9 billion in obligations for programming agreements as of the end of September, with only $3.6 billion included on its balance sheet.

“The value of nflx is so much more than its price that even if a buyer wrote a 8b check to pay it off its a bargain,” Cuban said.

Cuban isn’t the first billionaire to bet on Netflix. Carl Icahn is the currently the ninth-largest shareholder, with 2.9 percent of the stock, according to data compiled by Bloomberg. Icahn, in a filing in October 2013, said he sold 2.99 million shares of Netflix, citing a 457 percent rise in the stock since his original investment in November 2012. Icahn said his cost for the stock was $58 a share, suggesting a gain of almost $800 million from the sales.

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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