LION Stock Drops Over 4% After-Hours — Netflix Reportedly Dismisses Lionsgate Takeover Rumors

• A Netflix spokesperson told The Warp that it is “not interested” and has no plans to pursue an acquisition. 
• Semafor reported earlier on Tuesday that Netflix hadn’t submitted a formal indication of interest for Lionsgate. 
• The speculation comes amid a broader wave of Hollywood consolidation, including Paramount’s bid for Warner Bros. Discovery and Fox’s $22 billion deal to acquire Roku.

A brief spark of tech-and-entertainment speculation sent Lionsgate shares jumping nearly 14% on Tuesday, but the fire was quickly put out, with the stock down nearly 5% after-hours. 

Despite reports indicating that Netflix was eyed as a potential suitor for the independent Hollywood studio, sources familiar with the matter say the streaming giant is not interested. TheWrap confirmed that Netflix has no plans to acquire Lionsgate, bringing a swift halt to the day's loudest industry rumor. 

The market excitement originally heated up after a report by Semafor that listed Netflix among several media companies looking at Lionsgate. However, even that initial report noted that Netflix had not gone so far as to submit a formal indication of interest. 

Netflix's Shifting M&A Appetite 

Earlier this year, Netflix made an aggressive $83-billion bid to buy the streaming and studio assets of Warner Bros. Discovery (WBD). 

It ultimately backed away rather than match a rival $110-billion offer from Paramount Skydance. While it has kept its wallet tightly shut for giant studio buyouts, Netflix hasn't completely avoided deals. The company recently acquired Ben Affleck's InterPositive for up to $600 million to expand its suite of AI-powered filmmaking tools.

Lionsgate As A Prime Target

Even without Netflix in the running, Lionsgate remains highly attractive to buyers. Since splitting from Starz last year, the studio has faced pressure from activist investor Anson Funds to look into a sale or major asset divestitures.

Furthermore, Lionsgate Vice Chairman Michael Burns previously noted that the studio's massive library of premium content makes it a valuable asset for "a lot of different companies." Other players have already sniffed around; Legendary Entertainment was reportedly mulling a potential acquisition of the studio back in July.

LION, NFLX Retail View 

On Stocktwits, retail sentiment toward NFLX remained in ‘bearish’ territory over the last 24 hours, amid ‘high’ message volumes, while sentiment on LION was ‘extremely bullish’ with ‘extremely high’ message volumes. 

One user highlighted that the topic of LION takeover was officially on the table irrespective of Netflix’s interest. 

LION stock gained 79.2% year-to-date, while Netflix has lost 16% so far this year. 

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