Amazon.com (AMZN) stockholders have reportedly been buying Metro-Goldwyn-Mayer (MGM) for weeks. The film studio has long searched for a buyer. Amazon’s media divisions Prime Video and Amazon Studios will benefit from the acquisition. Amazon is considering buying Metro-Goldwyn-Mayer for $9 billion. Media reports confirm Amazon (AMZN) is seeking a new growth source, as the company was reported to have held discussions with MGM Holdings, which owns the 100-year-old studio Metro-Goldwyn-Mayer.
On Monday, Amazon shares rose 1.47% at the close of the NASDAQ trading session, continuing their rise during non-trading hours. A Variety report says that Amazon Studios vice president Mike Hopkins is spearheading the talks, with MGM chairman Kevin Ulrich as the other key players.
Earlier rumors stated that a possible deal worth $ 9 billion has surfaced: from $ 7 billion to $ 10 billion. Neither Amazon nor MGM responded to the message. MGM has long been considered a takeover candidate. In December, it announced it was in the market for buyers and hired consultants to collect offers.
It features one of the largest libraries of television shows and films in the world, which are licensed to Netflix and other streaming services. Which benefits will Amazon get from its Metro-Goldwyn-Mayer purchase? There’s a possibility Amazon will dominate the global video streaming market by ousting the existing leader, Netflix, by becoming the number 1 cloud computing provider and # 1 in e-commerce.
Amazon CEO Jeff Bezos lauded Prime Video’s success during the company’s first quarter in May. Users pay $ 119 for a Prime Club membership that includes free 2-day shipping, basic Prime Music, and other benefits.
In March 2021, the company had more than 200 million Prime customers, a 50-million increase since early 2020. Approximately 175 million subscribers streamed Prime Video content last year, according to Gene.
As many subscriptions to Prime Video are included in the general income category – membership fees – it is hard to estimate how much income and profits Prime Video brings in. Amazon does, however, believe in the importance of Prime Video, in addition to free shipping, in justification for an annual subscription.
It has been found that Prime members made ten times as many purchases on Amazon as non-subscription customers. It May best be described Amazon’s media expansion as one of the fastest-growing business segments, including digital ad revenue, movie view sales (new or franchise), and individual movie revenue.
The global video streaming market has seen a significant increase in competition in the past year. The company spent $11 billion last year on TV shows, movies, and music for its Prime service, increasing 40% over the previous year.
Beyond Amazon’s ambition to surpass Netflix, the company is also expanding in the healthcare industry due to the difficulty maintaining high revenue growth rates and profits. Despite Amazon’s revenue and earnings growth trend showing a positive trend, investors are no longer impressed by the company’s growth rate.
Amazon.com, Inc. (NASDAQ: AMZN) is up 35.7% over the past year, but growth has been muted since the beginning of 2021 – only 0.41% growth Nasdaq Composite index rising 3.8% and the S&P 500 climbing 10.8%.
Amazon shares need a significant new boost to increase their value – the agreement with Metro-Goldwyn-Mayer could provide such an impulse. Amazon expects to have profits of $21.3 billion by year’s end, enabling it to make large acquisitions and investments.