Amazon (AMZN) has been in talks to acquire the film studio Metro-Golden-Mayer in a deal that escalates a major battle for dominance in the video entertainment field, it was reported Tuesday. Amazon stock fell.
Privately held MGM has reportedly been searching for a buyer since December, with an asking price of $9 billion. The entertainment giant owns the rights to 4,000 films and 17,000 hours of TV content.
Reports of the talks initially emerged late Monday by The Information. Subsequently, Variety reported that Amazon offered about $9 billion. Apple (AAPL) and Comcast (CMCSA) had previously looked over MGM and decided it was worth roughly $6 billion, the New York Times reported.
Amazon stock dropped 1.2%, closing at 3,232.28 on the stock market today.
On Monday, AT&T (T) and Discovery (DISCA) announced that they will merge their media assets in a megadeal that creates a stronger rival to Walt Disney (DIS) and Netflix (NFLX) amid the global internet video streaming wars.
Amazon Chief Executive Jeff Bezos recently told investors it has 200 million customers of its Amazon Prime rewards program. Of that, 175 million stream its Amazon Video content. Only Netflix, with about 208 million viewers, has a larger audience for streaming video.
Netflix stock dipped 0.5%, to 486.28.
Amazon Stock Bolstered By Prime Video
Analysts attribute the multiyear rise in Amazon stock, in part, to Amazon Prime. Users pay an annual or monthly fee for the service and receive multiple perks, such as free access to Amazon Video.
In a signal of Amazon’s growing ambition in video, on Thursday Amazon announced that Jeff Blackburn, a former Amazon executive who helped build the company’s Prime streaming service, is returning to the company in a new position.
Blackburn will be senior vice president of global media and entertainment. He will oversee all entertainment business operations, including Amazon Studios, Audible, Twitch and related endeavors.
Amazon stock is currently not a buy. But keep an eye on it. The stock has been in a long consolidation phase and is approaching a buy point of 3,552.35.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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