I've traded around the volitility of this stock and am up and so have held a small position back to see what will eventually happen. I'm not as convinced NFLX will win as I am BBI will lose. I'm just curious to see what will happen.
ig, If you're convinced BBI will lose, then you must be convinced NFLX will win by proxy. Viable downloads for the masses are 5-7 years away at a minimum. NFLX will be in that market by the time it opens up. Also, there will always be non-computer people who prefer holding the DVD in their hand and who don't want the hassle of logging on, waiting for the download, hoping the download isn't corrupt, etc. BBI's death spiral pricing is the only thing that is holding NFLX back at this point, and NFLX is still turning a handsome profit. Remove BBI and NFLX will be romping in the fields. Which is why I am long on NFLX.
NFLX continues to gain customers by the hundreds of thousands on top of their already very profitable business. Those new customers are largely gravy. When next quarters' numbers come out, BBI will be deeper in the red than ever due to its unprofitable price structure and NFLX will continue to be piling up the cash and profits. Then it's "head for zee hills" for that 20% short position.