Netflix Gains on Buyout Speculation

There is talk that internet retailing giant Amazon.com has plans to buyout America’s biggest movie-by-mail company, Netflix. For Netflix shareholders, this has become good news, with Netflix seeing the value of its stock jump up to the highest it has been in the eleven weeks in what analysts are calling a typical turn of events.

Netflix and Amazon are direct competitors in the movie-by-mail business, so Amazon’s acquisition of Netflix would make sense. Amazon would then have access to Netflix’s 10 million subscribers, most of which take advantage of the mail system.

However, analysts are scratching their heads over a move that will force Amazon to collect sales tax in several states across the country in which Netflix operates, especially on the heels of Amazon’s decision to end its dealings with several marketing affiliates to avoid collecting sales tax. It remains to be seen whether Amazon will be able to absorb the inevitable drop in sales when it has to collect sales tax or if it has something else up its sleeve.

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