Netflix stock up on Amazon takeover talk: analysts

LOS ANGELES (Reuters) - Shares of Netflix Inc. (NFLX.O: Quote, Profile, Research, Stock Buzz) rose sharply in a down market on Wednesday on speculation that Amazon.com Inc. (AMZN.O: Quote, Profile, Research, Stock Buzz) would buy the online DVD rental company, analysts said.

Brian Pitz, at Bank of America Equity Research, said rumors of a deal of $34 per share, or a $2.1 billion purchase price for Netflix, were circulating in industry trade journals, but he added: "We believe a deal is unlikely."

A Netflix spokesman said the company does not comment on "rumors and speculation." Amazon representatives could not immediately be reached for comment.

Netflix shares closed up 5.7 percent, or $1.21, at $22.60 on Nasdaq. Amazon ended down 1.8 percent, or $1.36, at $72.29.

Andrew Wilkinson, senior market analyst at Interactive Brokers Group, also dismissed the takeover talk but said: "When we take a look at options volume, something is up at Netflix."

Netflix call volume looked aggressive due to takeover speculation, said Paul Foster, options strategist at Web information site theflyonthewall.com.

According to market research firm Track Data, 58,754 calls versus 11,033 puts traded in the company on Wednesday.

The heavy volume in the calls giving investors the right to buy Netflix at $22.50 a share by next Friday suggest investors anticipate an imminent announcement, Wilkinson added.

Those contracts closed at $1.05, up 85 cents on the day. But he figures much of the call volume of 18,928 contracts could have been the result of traders booking winning trades made earlier in the day.