Mark Cuban Says He’s Buying Netflix Stock, Sees Takeover

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Mark Cuban
“I’m buying NFLX stock,” Mark Cuban says in Twitter post. Photographer: David Paul Morris/Bloomberg

Oct. 17 (Bloomberg) -- Mark Cuban, the billionaire owner of the Dallas Mavericks, said he’s buying shares of Netflix Inc. because the online-streaming service will probably be acquired.

“I’m buying NFLX stock,” Cuban tweeted today. “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.

Netlix pared some of its losses today following the tweet. 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 Broadcast.com, 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.”

Netflix fell 1.3 percent to $357.09 at the close in New York after dropping as much as 5.6 percent.

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

‘Bargain’

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 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.

To contact the reporter on this story: James Callan in New York at jcallan2@bloomberg.net

To contact the editors responsible for this story: Cecile Daurat at cdaurat@bloomberg.net Crayton Harrison, James Callan

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