Weinstein Deal Pushes Netflix (NFLX) to Two-Year High

Chris Preston
August 20, 2013

Netflix (NFLX) shares have been white-hot of late. A new movie deal is keeping the stock scorching.

The Weinstein Co., one of the world’s top movie studios, has inked a multiyear licensing deal with Netflix. The deal begins in 2016, and will allow Netflix subscribers to view movies produced by the Weinstein Co. and Dimension Films within months of their theater releases.

News of Netflix’s latest megadeal pushed shares up 4.5% today. At $271, the stock is the highest it’s been since July 2011 and is fast approaching its $300 all-time high. Year-to-date, Netflix shares are up more than 180% after entering 2013 at less than $100.

The Weinstein deal comes on the heels of a similar agreement the company signed with Disney (DIS) last December. That deal also takes effect in 2016.

At the time, Disney was the first major film studio to sell its rights to Netflix. Prior to that, film studios had only sold their post-theater rights to premium cable networks such as HBO and Showtime.

Now it appears that the Disney deal wasn’t a one-time coup, but the start of a very encouraging trend if you’re a Netflix investor. If more studios sign on, it could open up a whole new revenue stream for the video subscription service.

Should that happen, the company’s earnings may eventually warrant its lofty share price.

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