Vizio TVs are displayed in a store on February 13, 2024 in San Rafael, California.
Justin Sullivan | Getty Images
Vizio shares, which rose after reports of the deal first emerged last week, closed at $9.53 on Friday. They jumped 15% in pre-market trading on Tuesday.
Walmart and its Sam's Club warehouse chain have long been big sellers of Vizio devices. But in purchasing the company, Walmart touted the potential to boost its advertising business through Vizio's SmartCast operating system, which allows users to stream free ad-supported content to their TVs.
As it seeks higher profits, the retail giant has tried to expand its Walmart Connect media business, which comes with larger profit margins than selling groceries or apparel. Ad sales for this segment grew 22% in the fourth quarter.
“We believe VIZIO's customer-focused operating system delivers great viewing experiences at attractive prices. We also believe it enables a profitable advertising business that is expanding rapidly,” said Seth Dallaire, executive vice president and chief revenue officer, Walmart US. statement.
The move comes as Walmart tries to compete with Amazon's growing advertising business.
Walmart's control of Vizio's platform will give companies that advertise with the retailer greater reach. In a press release, Walmart said Vizio's SmartCast system has 18 million active accounts.
The retailer also said it could offer “innovative TV, entertainment and media experiences at home” following its acquisition of the TV maker.
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