For months, Netflix has been at the center of rumors about a possible acquisition by companies like Microsoft or Amazon — but a recent disclosure by corporate raider Carl Icahn may offer the most concrete proof yet of an imminent takeover. The company's stock soared on Thursday when Icahn revealed in an SEC filing that he had acquired a 9.9 percent stake in Netflix, explaining that he believes the company is undervalued. Icahn has predicted a "great consolidation" between Netflix and Amazon, Microsoft, Verizon, or Google in the future. After months of speculation, is this a sign that Netflix is finally in play?

Netflix has never been a more attractive prospect for bidders: It's not for nothing that the disclosure of Icahn's investment "comes just days after rumors that Microsoft might also be sniffing around Netflix," say Charles Cooper and Greg Sandoval at CNET. Those rumors remain unconfirmed, but "throw in the fact that Netflix CEO Reed Hastings resigned recently from Microsoft's board and you have a lot of smoke." And even if Microsoft isn't interested in Netflix, there are other high-profile possibilities still in play; in recent years, Amazon, Yahoo, and Apple have each been rumored as potential buyers for the company.
"With Icahn move, Netflix is now officially in play"

Icahn is wrong about Netflix's potential: It remains unclear "how Icahn could help Netflix or what the company could do to appease him," but Icahn is wrong about other companies' interest in Netflix, says financial analyst Michael Pachter at Businessweek. Though rumors about a potential Netflix buyer continually cycle, few companies have any viable reason to acquire the company, and — "the one company that might make a good fit" — is hard at work on its own video-streaming service. Despite Icahn's wishes, as long as Reed Hastings remains CEO, Netflix will likely focus "on selling itself rather than on building its business" to attract a bidder.
"Netflix shares take off after Carl Icahn takes 10 percent stake"

And Netflix's business model remains unsustainable: Netflix's stock has been on a "wild ride" for months, says Panos Mourdoukoutas at Forbes, and the company's "two quarters of disappointing earnings and subscription growth" don't bode well for its future or make it an attractive option for acquisition. The problem is simple: Netflix's business model isn't sustainable. Unlike video-streaming rival Amazon, Netflix doesn't sell anything; it's merely "a site where it sells somebody else's products." In the end, Netflix is "at the mercy of content providers," and as those content providers find more profitable ways to sell their products, Netflix's attractiveness to prospective buyers will continue to diminish.
"Why is Carl Icahn interested in Netflix?"