Why Roku stock is surging despite sea of red? Here’s what we know

September 15, 2022, was not a great trading day for the stock market, as both the S&P 500 and the Nasdaq fell more than 1% for the session. The financial markets seem to be bracing themselves for a recession, further rate hikes, and higher inflation rates.

However, in the sea of red stocks, Roku (NASDAQ: ROKU) finished the day up 7.99%, seemingly due to a recent 8-K filing that amended the TV-streamer’s severance benefit plan in the event of a change in control.    

Market participants started the speculation that a takeover may be coming; this is a follow-up on the initial June acquisition talks swirling around at that time caused by the firm abruptly closing the trading window for employees.

ROKU chart and analysis

In the last month, ROKU has been trading in a wide range from $62.15 to $79.05, with a negative long-term trend. Furthermore, data shows that 91% of all stocks performed better than ROKU in the past year. 

Though the stock is now trading in the lower part of its 52-week average, above the 20-day moving average, meanwhile, technical analysis shows a support line at $65.52 and a resistance line at $73.82.

TipRanks analysts rate the shares a ‘moderate buy,’ with the average price in the next 12 months reaching $81.43, 10.32% higher than the current trading price of $73.81. Notably, out of the 22 TipRanks analysts covering the stock, 12 have a buy rating, while 5 have a hold and another five a sell rating.

Uncertain future

It is unclear whether a takeover will occur; the fact that CEO Anthony Wood controls 59% of the voting power through B-class shares will make it more difficult. Initially, investors speculated that Netflix (NASDAQ: NFLX) might be a potential suitor, but no official statements were made either from Netflix or Roku. 

For now, keeping both of these firms on the watchlist and tracking trading volumes could reveal if there is any merit to these speculations.

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