Amazon Goes To Hollywood On MGM Buyout Rumors

Reports came out last night that e-tail giant Amazon.com, Inc. (NASDAQ: AMZN) is in talks to buy MGM Holdings' (MGMB) film studio in a deal that could be worth up to $10 billion, though some sources say the deal will be worth anywhere from $7 to $9 billion. This would position AMZN firmly in the entertainment industry, but the firm has yet to comment on the speculation.

Amazon AMZN stock news and analysis

Nevertheless, AMZN is climbing the charts today, up 0.8% at $3,292.89, in an effort to recoup from the early May selloff that's devastated tech. This pullback looks to have found its footing near the $3,150 level, which served as pressure briefly in February and March. Should today's gains hold, the equity could be looking to string together its fourth-straight win, and year-over-year the security is still up over 35%. 

Last month's blowout earnings report brought in plenty of analyst bull notes, and the brokerage bunch has maintained this optimism, despite the pullback. Thirty-one analysts covering the stock call it a "strong buy," and four say "buy," with nary a "sell" or "hold" rating to be seen. Plus, the 12-month consensus price target of $4,258.98 is a 29.3% premium to last night's close. 

Option traders, on the other hand, are leaning a bit more bearish than usual. This is per AMZN's 10-day put/call volume ratio of 0.79 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Adding to this, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.88 stands higher than 73% of readings from the past year. This means short-term option players have been much more put-biased of late. 

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