Lionsgate Market Volatility
Lionsgate Shares Fluctuate as Netflix Denies Acquisition Plans, Highlighting Broader Industry Consolidation
Anonymous
Key Points
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In parallel with the Lionsgate rumor, Netflix was also rumored to be interested in Fox’s ~$22 billion deal for Roku; however, a Netflix spokesperson told Semafor that “Netflix did not make a bid for Roku.”
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Lionsgate’s post–Starz-split structure was designed to make it easier to value and buy: the company said its studio business would “trade as LION and become a standalone content company,” including film, television, 3 Arts Entertainment, and “a library of more than 20,000 film and TV titles.”
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Lionsgate’s recent performance and investor narrative were cited as part of the takeover discussion: in its latest quarterly report it posted $906.5 million in revenue, $117.5 million in operating income, $70.2 million in net income, and $165.4 million in adjusted OIBDA—and CEO Jon Feltheimer said the library had “achieved a billion dollars in trailing 12-month revenue for three quarters in a row.”
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The articles noted external pressure on Lionsgate to consider strategic options after the Starz split: activist investor Anson Funds has pushed the company to “look into a sale or major asset dives,” supporting the idea that the studio could be open to consolidation even without Netflix involved.
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Netflix executives signaled during the earlier Warner Bros. Discovery pursuit that the company was building acquisition capabilities; Ted Sarandos said on an earnings call that Netflix “really built our M&A muscle” during the WBD bid, offering context for why investors treated the Lionsgate rumor as plausible.
Lionsgate Studios shares swung wildly this week after a report suggested Netflix was eyeing a takeover, only for Netflix to shoot it down. The stock surged nearly 14% on June 15 after Semafor reported Netflix was "intensively evaluating" a bid. Less than 24 hours later, Netflix told reporters it "has no plans to pursue an acquisition of Lionsgate" — and the stock gave back roughly 10% of those gains.
The two-day whipsaw left Lionsgate trading just above where it started. But analysts and activist investors say the episode reveals something real: the newly standalone studio, home to John Wick and The Hunger Games, looks increasingly like a buyout target — with or without Netflix in the picture.
How the Rumor Sparked a 14% Single-Day Surge
The frenzy started June 15 when Semafor published a report citing sources familiar with the matter. It said Netflix was holding internal talks about a Lionsgate bid. No formal offer had been made. Still, investors piled in. Trading volume tripled its 30-day average within 90 minutes of the market opening, according to the research briefing.
Reports then surfaced via Variety that Netflix may also have been a silent bidder in Fox's pending $22 billion acquisition of Roku. Netflix denied that too, telling Semafor directly: "Netflix did not make a bid for Roku." By June 16, both rumors were dead — and Lionsgate shares had shed nearly 10% from their peak, according to TIKR.
Netflix's Denial Comes With a Complicated Backstory
Netflix's flat denial was swift. But it landed in a market that knows the company has been shopping. Netflix Co-CEO Ted Sarandos said on a prior earnings call that the company had "really built our M&A muscle" during an earlier look at Warner Bros. Discovery — a deal Netflix ultimately walked away from, according to Screen Daily.
That history made investors slow to dismiss the Lionsgate rumor outright. Aktiensensor noted Netflix's share price dropped 3.5% amid the string of missed acquisition opportunities — Roku and now Lionsgate — signaling that markets had priced in some expectation of a big deal that never came.
Lionsgate Was Built to Be Bought After the Starz Split
Lionsgate's current structure is not an accident. The company recently completed a spin-off of Starz, its cable and streaming unit. The goal was to let the studio trade as LION and become what the company called "a standalone content company." That clean break removed the one asset most tech buyers — Netflix, Apple, Amazon — have no interest in owning: a linear cable network.
The remaining studio business is substantial. In its latest quarterly report, Lionsgate posted $906.5 million in revenue, $117.5 million in operating income, and $70.2 million in net income. CEO Jon Feltheimer said the company's library of more than 20,000 film and TV titles had "achieved a billion dollars in trailing 12-month revenue for three quarters in a row."
Activist Pressure Keeps Lionsgate in the M&A Crosshairs
Even with Netflix out, Lionsgate faces pressure to find a buyer. Activist investor Anson Funds has pushed the company to "look into a sale or major asset dives," according to Bloomberg cited in the research briefing. Anson argues the Starz split has finally revealed a high-margin studio business that should be absorbed by a larger tech or media player.
The broader Hollywood landscape adds urgency. Paramount is pursuing a bid for Warner Bros. Discovery. Fox is closing in on its $22 billion Roku deal. In that environment, a mid-sized studio sitting on franchises like Twilight, John Wick, and The Hunger Games — with $1 billion in annual library revenue — is unlikely to stay independent for long. Sony and Amazon are names analysts now mention as possible suitors, according to Broadcast Now.
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