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Zacks' 7 Best Strong Buy Stocks (New Research Report)
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Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
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Why 21st Century Fox (FOXA) Stock Surged Today
Shares of 21st Century Fox (FOXA - Free Report) suddenly popped over 6% in Monday afternoon trading, shortly after reports suggesting that the company was looking to sell most of its assets to Disney (DIS - Free Report) emerged.
According to people familiar with the matter cited by CNBC, Fox has been holding talks with Disney over the past few weeks, but there is no certainty that the discussions will lead to a deal. In fact, these sources said that the chatter has been on again, off again, and the two sides are not currently engaged in deal talks.
Per CNBC’s initial report, Fox’s willingness to engage in sales talks stems from a growing sense among senior management that the company would not be able to reach the scale believed to be needed for success in today’s media world through acquisitions.
Nevertheless, it does not appear that Disney would purchase all of Fox. Instead, Fox believes that a “more tightly focused group of properties around news and sports could compete more effectively in the current marketplace,” said CNBC.
Movie and television production companies like 21st Century Fox have been challenged by the likes of Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) , Alphabet (GOOGL - Free Report) , and Facebook in recent years, with each of these tech behemoths working to change the nature of content consumption in their own individual ways.
This evolution has also affected Disney, which has struggled with subscriber losses in key entities like ESPN. In response, the massive media conglomerate is preparing to launch its own direct-to-consumer streaming service, and adding another studio such as Fox could potentially bolster that platform’s appeal.
Shares of FOXA surged more than 6.5% to touch an intraday high of $26.60 in the wake of CNBC’s initial report. Disney shares were up about 1.3% at the time of this writing.
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Wall Street’s Next Amazon
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