(Image source: Technorati)

BY KERRY LEARY
ANCHOR JASMINE BAILEY


Netflix has a new business partner that the company may not be too happy about. Carl Icahn, the well-known business mogul, announced he’s acquired 10 percent of Netflix shares. But Netflix already has a defense mechanism called ... the poison pill. Here’s WXXA.

“The plan is designed to make it difficult for someone or group with 10 percent or more Netflix shares to take over the company without an agreement from the board. if that happened, additional shares would flood the market.”

Flooding the market would make it more expensive to take over. The Los Angeles Times reports, Icahn believes Netflix’s defense mechanism is quote “troublesome.” He filed a statement with the SEC noting,

“‘As one of the company's largest shareholders we are concerned about the poor corporate governance at Netflix...’ … Icahn also took issue with the subscription service staggering the terms of its directors, with one-third of  members up for reelection every year.”

But a writer for TIME notes, Netflix’s defense isn’t shocking.

“Put simply, if you’re a corporate CEO or board member, and Icahn takes a large stake in your company, you’ve got a problem. So it’s no surprise that Netflix has responded with a poison pill defense.”

But a CNET analyst doesn’t believe Netflix is worth the battle.

"If this were some chemical or pharmaceutical company and there's massive synergies created by combining it with another company ... then I get that. But I think [Icahn has] fooled himself into thinking there's value here that he can unlock."

And a writer for MarketWatch foresees problems for anyone looking to invest in Netflix.

“The problem is that … Netflix is not cheap by any measure … Pushing for a takeover of Netflix might not get very far, as many on Wall Street are already flummoxed about possible combinations.”
 

Netflix, Carl Icahn and the Poison Pill

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Nov 6, 2012

Netflix, Carl Icahn and the Poison Pill

(Image source: Technorati)

BY KERRY LEARY
ANCHOR JASMINE BAILEY


Netflix has a new business partner that the company may not be too happy about. Carl Icahn, the well-known business mogul, announced he’s acquired 10 percent of Netflix shares. But Netflix already has a defense mechanism called ... the poison pill. Here’s WXXA.

“The plan is designed to make it difficult for someone or group with 10 percent or more Netflix shares to take over the company without an agreement from the board. if that happened, additional shares would flood the market.”

Flooding the market would make it more expensive to take over. The Los Angeles Times reports, Icahn believes Netflix’s defense mechanism is quote “troublesome.” He filed a statement with the SEC noting,

“‘As one of the company's largest shareholders we are concerned about the poor corporate governance at Netflix...’ … Icahn also took issue with the subscription service staggering the terms of its directors, with one-third of  members up for reelection every year.”

But a writer for TIME notes, Netflix’s defense isn’t shocking.

“Put simply, if you’re a corporate CEO or board member, and Icahn takes a large stake in your company, you’ve got a problem. So it’s no surprise that Netflix has responded with a poison pill defense.”

But a CNET analyst doesn’t believe Netflix is worth the battle.

"If this were some chemical or pharmaceutical company and there's massive synergies created by combining it with another company ... then I get that. But I think [Icahn has] fooled himself into thinking there's value here that he can unlock."

And a writer for MarketWatch foresees problems for anyone looking to invest in Netflix.

“The problem is that … Netflix is not cheap by any measure … Pushing for a takeover of Netflix might not get very far, as many on Wall Street are already flummoxed about possible combinations.”
 

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