Is Netflix Is Shopping Again? Here’s What’s Happening With the Shares

Shares of Netflix (NFLX) are down more than 4% Tuesday on higher-than-average volume. We are seeing chatter that, after losing out on Warner Bros. Discovery (WBD) to Paramount Skydance (PSKY), and Fox (FOXA) making a run at Roku (ROKU), Netflix is eyeing Lionsgate Studios (LION), as are a few other suitors.

As we saw with the Warner Bros. transaction, Netflix is not afraid to walk away from a deal if the valuation and reasoning behind it no longer make good financial sense. Semafor.com is one of the sources of this speculation, reporting that Netflix walked away from a potential Roku deal.

With that said, what do we know about Lionsgate?

For starters, key properties include major film labels such as Lionsgate Films and Summit Entertainment, television production divisions, and production facilities such as Lionsgate Newark Studios. Major franchises include The Hunger Games, John Wick, The Twilight Saga, The Expendables, Saw, and Now You See Me, among others.

On the surface, that would make a good content engine fit for Netflix’s global footprint and expanding advertising business. The two also have an existing content relationship, and Netflix could leverage Lionsgate’s airline relationship for its proprietary content as well as tie in its existing video-game business. It may require some rationalization, given the studio complex Netflix is building at Fort Monmouth in New Jersey, where its plan is to build a state-of-the-art production facility with 12 soundstages and ancillary production support.

The other item would be one we raised when discussing Netflix’s bid for Warner Bros. Discovery, and by that we mean the company making a large acquisition. It has done more than a dozen small nip-and tuck-acquisitions over the years, including seven between 2021 and 2022, mostly to build out its gaming effort. But with revenue for the 12 months ending March 2026 of $2.6 billion, that’s a relatively small bite to take compared to the $39 billion in revenue Netflix posted in 2025.

Lionsgate has ~$1.95 billion in debt on its books and $341.5 million in cash at the end of March. Following the success of its musical biopic Michael, which had over $900 million in global ticket sales, odds are that cash figure is higher now. In early 2025, Lionsgate completed its corporate separation from Starz, a move that made the standalone studio an attractive asset for industry consolidation.

To us, a pairing of the two companies sounds like it has good potential, but as we know, it will come down to the price Lionsgate is looking for and the one Netflix may be willing to offer. If we see Netflix go forward with a bid, we will review the terms and, if it makes sense, look to build out the Portfolio’s position. If this turns out to be more smoke and mirrors, with Netflix walking away from a deal, that will give us a reason to take advantage of the incremental pullback we are seeing in the stock.

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At the time of publication, TheStreet Pro Portfolio was long NFLX.