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Netflix, Inc. (NFLX) Message Board

  • wright1bby wright1bby Oct 14, 2005 11:58 AM Flag

    I'm selling

    I thought NFLX was a good buy when I bought in @ 9.27 but I have a hard time believing it is worth 3 times that much just a few months later with no major unexpected developments.

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    • "ring that cash register" ---- you're a smart investor

    • Wright1bby:

      You wrote:

      "I thought NFLX was a good buy when I bought in @ 9.27 but I have a hard time believing it is worth 3 times that much just a few months later with no major unexpected developments."

      No major unexpected developments? You must have had your head up your rear for the past several months.

      Just a short summary of what happened to make NFLX price move:

      1. Walmart Quit
      2. BBI warns and earnings fall
      3. MOVI does the same
      4. NFLX beats all targets and expectations
      5. NFLX makes great projections

      I would say these are all major developments. Of course to one like you that can see into the future maybe they were not unexpected, but I promise you they were not factored into the price at 9.

      My target is 40.

      • 1 Reply to twophasekid
      • 1. Walmart Quit
        unexpected-yes major-no
        Walmart never seriously went after the business as has been evident by their pricing and membership levels for at least a year. Competition from Amazon was the major big boy feared 7 months ago. That fear seems to have went away though how much the possibility of them entering the market has decreased is anyones guess.
        2. BBI warns and earnings fall
        Neither unexpected nor major. They eliminated late fees, the highest margin portion of their business. They said they would make it up with increased rental revenue. Obviously to make up the profits on high margin business on low margin business they would have to do a lot more low margin business. The fact that they wern't going to be able to do that was quite predictable.
        3. MOVI does the same
        MOVI goes from debt free to about a billion dollars in debt after getting in a bidding war over HLWD. This was bound to cause some hicups though I did not expect the severity of their decline in revenues.
        P.S. A shrinking pie isn't that good for anyone even the company gaining market share so I don't see this as necessarily a positive for NFLX.
        4. NFLX beats all targets and expectations

        Really? When I bought in March NFLX was projecting for 2005 to end the year with 3.85 to 4.15 million subscribers. They were projecting 700-730 million in revenue. They were projecting a GAAP loss of 5-15 million for the year.
        Are they on a pace to beat all those targets and expectations??? Looks to me like they will beat on GAAP meet on subscribers and be low on the revenue.
        5. NFLX makes great projections
        As they have for several years


        just my .02

    • Perhaps it was UNDERVALUED at $9.27/share.

      It had a huge drop when it looked like Wal-Mart was going to swing their clout into the market. That didn't work out for Wal-Mart and the stock has rebounded.

    • I took my profit - bought at 20. There is likely a loing term up trend but for a while my guess is that we'll see some retracing or sideways movement.

      Overall the market is rather frothy so this is one of my stocks moved back in to cash.

 
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