The ITV share price is in a tight range as the market digests news that Amazon could acquire MGM in a deal worth more than $9 billion. Amazon and MGM have not yet confirmed the deal. ITV stock closed at 129p yesterday, where it has struggled to move above in the past.
Why Amazon and MGM matters: Amazon, the giant e-commerce and cloud giant is said to be interested in MGM. The news came on the same day that AT&T announced that it would divest its Time Warner interest and merge them with Discovery.
If Amazon acquires MGM, ITV could be affected although the extent of this are not yet well-known. This is because ITV has exclusive rights to James Bond movies that are owned by MGM. Amazon’s goal will be to add the movies to its Prime Video package. In a statement, an analyst told Telegraph:
“The major difference with having it on a big streaming service, however, is that it would cannibalize renting or buying the film online. At the moment ITV’s rights are very limited when it comes to catch-up or live streaming of James Bond, so renting or buying is protected.”
The impact of this deal will not have a major impact on ITV. For one, the company already produces highly popular shows like Innocent, Love Island, and the Real Housewives. The company is also expected to grow its ad business as the UK economy recovers. Also, it could be positive because it will save the company money in contract renewal costs.
ITV stock outlook
The daily chart below shows that the ITV share price has been in a tight range recently. The stock has formed an ascending triangle pattern whose resistance is at 128p. The shares are also between the 23.6% and 38.2% Fibonacci retracement level. Further, the stock is slightly above the 50-day and 25-day exponential moving averages (EMA).
Therefore, the shares may soon break out higher as bulls target the 23.6% Fibonacci retracement level at 138p. However, a drop below the 38.2% retracement at 121p will invalidate this prediction.
ITV share price chart
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