Shares of Lionsgate surged 14% Tuesday on merger chatter, then fell after-hours as Netflix shot down speculation that it was eyeing the standalone studio.

“Netflix is not interested and is not pursuing Lionsgate,” a spokesperson for the giant streamer said bluntly.

Lionsgate Studios separated from Starz in May of 2025, positioning both companies as pure play acquisition targets. Lionsgate had long been considered a “free radical” (term coined by John Malone) in the entertainment space. With the split, it sought more optionality and a higher stock price.

The stock has performed. Lionsgate Studios shares, which were trading at around $6 when the company separated, ended the day at over $16 — backtracking some (3.5%) in late trading after Netflix rained on the parade.   

The optionality is still being tested.

Lionsgate CEO Jon Feltheimer has acknowledged the studio lacks scale compared to Hollywood majors. But as the town hunts for IP, the company has some big franchises like John Wick and a strong slate across film and television.

Box office juggernaut Michael is almost at a billion dollars with a second film on the life and career of the King of Pop in the works. The Hunger Games: Sunrise On the Reaping will hit this fall. Having just completed filming, Mel Gibson’s two-part The Resurrection Of The Christ is teed up for spring of 2027 and 2028.

“Lionsgate has been a willing seller at the right price. But, in the past, whenever they got close, they were asking more than the market was ready for,” says one Wall Streeter.

The question seems to be whether the substantially higher stock price will continue to be a deterrent even amid success. There have also been concerns that some rights to to titles in its extensive library are entangled or shared with other entities — something the company has pushed back on in the past.

Lionsgate declined to comment.

Netflix shares, meanwhile, closed down 4% at about $79 today.

The stock has fallen since the streamer won and lost Warner Bros. and tends to take a hit with every new deal rumor. Investors have grown wary that after so long with little to no M&A, Neflix brass now believes it needs an acquisition. The streamer has insisted that Warner Bros. was an unnusal asset, and even that was a “nice to have,” not a “need to have” deal.

The streamer walked away from WBD with a $2.8 billion breakup fee after declining to outbid David Ellison’s Paramount.

A rep for Netflix told Deadline it is not interested in acquiring Imax either as the big screen exhibitor is yet another company currently exploring strategic options. There’s been speculation that private equity is a likely buyer but Deadline hears Imax’s longtime bank Raine is fielding interest from a range of strategic buyers and others in the entertainment space.

Imax declined to comment.

According to sources familiar with the situation, Netflix did not bid for Roku, which on Monday announced plans to sell itself to Fox Corp.

Deadline has heard the streamer would potentially be interested in Sony Pictures. In fact, Netflix would be far from alone if the Culver City-based studio was for sale — but it is not. SPE declined to comment but parent Sony Group a few years ago unveiled what it called a new Creative Entertainment Vision that puts the division in the center of its corporate universe and has been adamant that it’s keeping the business.

Wall Streeters had predicted a wave of consolidation could reconfigure the industry back when Comcast announced plans to spin off Versant and WBD to separate studios and streaming from global networks. Big ticket deals announced or closed since then include Paramount-Skydance, Paramount-WBD, Charter-Cox, Nexstar-Tegna (state Attorneys General sued to block this one) and Fox-Roku. More are likely to come.