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Netflix, Inc. (NFLX) Message Board

  • hedgepro2003 hedgepro2003 Oct 18, 2004 12:48 PM Flag

    BUYOUT

    New issue of Barrons (page 14) says excluding NFLX�s $167 million in cash from current $555 million market cap, subscriber base valued at $350 million which is just:
    ......o $160 each for each of 2.2 million current subscribers,
    .............or
    ......o $87 each for 4 million subscribers projected by end of 2005.
    Barrons says the cheapest way for Amazon to enter into the business would be to buy NFLX, and says other potential buyers include Blockbuster and Interactive Corporation. NFLX�s announcement crushing stock price has put the company in play.
    Buyout coming! WalMart, Amazon, Blockbuster, and Interactive Corp. will be tripping over each other to make a deal, before the other one does!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • But why would Amazon need or want this business?

      NFLX has now admitted they have to operate at breakeven to compete. Plus BBI just reduced their monthly price below NFLX, so if NFLX drops again, they will be operating at a loss.

      What's the attraction for Amazon? They could just wait longer and let these two fight it out, destroying each other in the process. Then step in and buy the winner if they want to at all.

      Someone else posted this before, but it bears repeating. This business has no barrier of entry by new competitors, and the technology could be eclipsed by something way better in just a few months or years.

      Absolutely no protection of their revenue stream. This stock is headed to zero. I wish I could have seen this coming a week ago like so many others on the board did.

      • 1 Reply to tagetlocman
      • "Someone else posted this before, but it bears repeating. This business has no barrier of entry by new competitors, and the technology could be eclipsed by something way better in just a few months or years."

        True, my friend, VERY true. Netflix has acknowledged this already. I don't recall the exact quote, but the CEO recently stated he didn't name the company "DVD's by mail." Netflix is committed to delivering content digitally, not just by snail mail. I cannot predict what will happen to the stock price, but I can say that the Netflix-Tivo deal makes tremendous business sense, and remains a couch-potato's dream.

    • What would be the price?

 
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