Sky Network Television Ltd [NZX:SKT] has risen by 4.17% at the time of writing today, with the stock price currently sitting at $0.750.
Sky — founded in 1987 — is New Zealand’s largest pay-per-view satellite TV provider. A popular presence in many Kiwi households, the company is well-known for its sporting coverage, as well as its movie and documentary offerings.
Sky currently has a market cap of $327 million.
Why has the [NZX:SKT] share price risen?
Market sentiments today were positive after a surprising announcement that seemingly came out of nowhere.
Here are the key highlights:
- Sky has inked a deal that will see the company working together with Spark [NZX:SPK] as partners in the video-on-demand (VOD) market.
- Spark has agreed to sell its Lightbox streaming platform to Sky. The sum is confidential.
- Effectively, this means that a merger between Sky’s existing platform, Neon, and Lightbox could be on the cards.
This has given rise to a bullish mood amongst investors, leading to a sharp buy-up of of Sky shares.
Where could Sky Network Television go from here?
Sky previously posted a net loss of $608 million for the financial year, and to add to the sour news, it also declared that dividends would be suspended.
Sky has lost over 40,000 subscribers in the past 12 months, a trend that has been accelerated by fierce competition from other streaming services such as Netflix, Amazon, and Disney+.
By now partnering closely with Spark, it is hoped that Sky will be able to recoup its losses and regain its momentum.
However, a merger of this size would require regulatory approval from the government. This presents an element of uncertainty.
For now, it’s a case of wait and see.