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Netflix, Inc. (NFLX) Message Board

  • singhlion2001 singhlion2001 Jan 30, 2013 5:00 PM Flag

    NETFLIX BANKRUPT TWICE AND STILL MASSIVE FRAUD LOOT ALLOWED BY S.E.C. CRIMINAL WATCH PARASITES IN USA

    NETFLIX BANKRUPT TWICE AND STILL MASSIVE FRAUD LOOT ALLOWED BY S.E.C. CRIMINAL WATCH PARASITES IN USA
    Netflix Narrowly Avoided Doom In 2013
    Netflix (NFLX) CEO Reed Hastings is a spin-master, second only to Jeff Bezos. No matter what results Netflix reports, things are always sunny. Those who mock the old price increases and Quikster debacle forget that the stock rose on the day of the announcements. The latest slight of hand is the move to explore taking advantage of the current low interest rate environment, while stating that Netflix has sufficient cash on hand to fund expenses. This is not true. In fact, if Netflix had not issued additional debt, there is a strong likelihood of financial disaster in 2013.

    This same argument was used last time Netflix sought financing in late 2011, but this time around, people seem to fully believe the argument. Ironically, Hastings' spin is more misleading than in 2011. I will provide a look at the massive content obligations due in 2012 (minimum of $2.45 billion). For those looking for a good story about Netflix, I suggest Rocco Pendola's piece from early January. Rocco is a story investor, not a numbers guy, but I believe few people in the world have a better grasp of the business model situation.
    ------------------------
    My Background

    This might seem like fluff, but I believe it's important to understand an analyst's history and potential bias.

    I shorted Netflix from 2010-11, and I played a series of out-of-the-money earnings puts during 2012. The first time, I entered around $170, rode to $300, and back down to around $90. My thesis has always been overvaluation on a bad business model -- last January I predicted that Netflix would need major financing to avoid bankruptcy by 2013.

    In hindsight, my subscriber growth estimates were way off. I predicted averages of 19.5 million domestic and 2.5 million international; instead we saw 23.5 million and 3.5 million, for a yearly run revenue difference of $480 million. For Q1 2012, I suggested a massive out-of-the-money (1w) "lottery ticket" put play on earnings. This turned into a massive profit. I then lost interest in Netflix for the next few quarters.

    The Debt Deal

    Netflix announced yesterday the pricing of $500 million in eight-year notes at 5.375%. The current commercial yield index is at 3.38% and high-yield index is at 5.89%, placing NFLX just shy of junk territory. The debt deal by itself makes sense. The bond markets are starved for yield and Netflix needs the cash. I'm not decrying the offering; my point is that this isn't a Microsoft (MSFT) or Intel (INTC) type of advantage play -- this cash was needed to ensure operations, and Netflix is extremely lucky to receive it.

    Netflix redeemed the $200 million 8.5% senior notes due in 2017 (issued November 2009), for an estimated expenditure of $225 million. This move changes annual interest expense from $17 million to $29.45 million. Essentially, Netflix is only paying $12.45 million, or 4.53%, on the new $275 million -- a huge win for it.

    The Need and Spin

    I've tracked relevant quarterly Netflix stats since Q1 2009 and highlighted the best (three) results in green and the worst (three) results in red. Pay close attention to the Rev/AP and Quick/AP.

    Click to enlarge image.

    Coverage by Quick Ratio

    The dark red marks the quick/AP ratio Netflix faced prior to the November 2011 financing. As you can see, Q4 2012 is the second worst level in history. My definition of Quick/AP ratio is (cash+sti)/(current content liabilities+ap). If you include the total liabilities from a quick perspective Netflix had a ratio of 0.30 prior and 0.42 post debt issuance. Comparatively to Netflix's 2011 "disaster phase" Netflix had ratios of 0.39 prior and 0.82 post.

    Coverage by Revenue

    Assuming annual run-rate revenues, NFLX had revenue coverage of 3.51x in November 2011. In January 2012, NFLX has revenue coverage of 1.54x. Netflix needs to keep other expenses (non-content gross costs, marketing, tech and development, G&A, legal, and interest) below 35% of revenues just to break even in 2013.

    Netflix is clearly in a worse liquidity position than during the horrendous fall 2011 phase.

    Managing the Enormous Liabilities

    As I stated earlier, all other expenses must stay below 35% of revenues for Netflix to break even in 2013. This assumes three things: 1) sub growth will be flat across the board, 2) Netflix will not incur any additional liabilities, and 3) Netflix will not pursue any large expansion plans. I believe sub growth will continue slowly, with a spike this quarter due to the new content, but I also believe content liabilities will increase at a similar pace. As an additional precaution to already referenced content costs, Netflix states: "For agreements with variable terms, we do not estimate what the total obligation may be beyond any minimum quantities and/or pricing as of the reporting date." In other words, the $900 million-plus that is due in 2013 might actually be much larger -- it's very likely that these variable contracts are tied to subscriber counts.

    In 2012, Netflix spent $485 million on marketing, $329 on tech and dev., $120 million on G&A, and $923 million on non-content gross ($2.625 billion gross exp-$1.591 billion streaming-$65.4 million dvd-$45.5 million depreciation). This equates to 51.4% of revenues -- this year Netflix needs to hit 35% to break even.

    My Model

    As I admitted above, last January I missed poorly -- very poorly -- on sub counts. Please take my revenue estimates with a grain of salt.

    Revenue

    DVD: Avg. 6.5 million at $11, Streaming-dom 27.5 million at $8, Streaming-intl 6.5 million at $8 -- total revenues of $4.12 billion.

    Expenses

    $500 million marketing, $320 million tech and dev., $125 million G&A, $30 million interest -- $975 million.

    Gross non-content expenses of $1 billion.

    Liabilities of $2.695 billion (assuming 10% growth above the current level).

    Cash Position Update

    Drop of $550 million vs. Netflix Quick of $498 million -- Netflix needed more cash to avoid bankruptcy or restructuring in 2013.

    Caveats

    I'm assuming massive blowback on my model/projections, especially considering my miss on subs last year. I encourage challenges on my numbers, primarily on the "gross non-content" since this is really a huge black box. It is possible that the GNC could drop a tad and equally possible that the liabilities will remain flat, or be renegotiated back a few months.

    It's also possible that we could see 30%-plus annual growth in subs. To be clear, my model predicts 27% average year growth, a number that I consider to be already very high.

    Sentiment: Strong Sell

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    • P/E of 580 is a joke!!!

      Sentiment: Strong Sell

    • Red alert in usa

      hang s.e.c. Criminal parasites in a public square

      Sentiment: Strong Sell

    • Biggest fraud loot ever in history of usa by reed hastings at netflix/goldman sachs led scam gang under your presidency with full protection provided by all watch dog agencies in usa but who instructed these agencies to allow the fraud loot and still going on with full protection

      has to be from commander in chief? Means you mr president obama

      Sentiment: Strong Sell

    • Biggest fraud loot ever in history of usa by reed hastings at netflix/goldman sachs led scam gang under your presidency with full protetcion provided by all watch dog agencies in usa but who instructed these agencies to allow the fraud loot and still going on with full protection

      has to be from commander in chief? Means you mr president obama

      Sentiment: Strong Sell

    • Arrest these criminals asap, seize the loot and hang them in a public square

      Sentiment: Strong Sell

    • DUMP SIGNAL FLASHING:BIGGEST FRAUD TRIANGLE WITH 3 SCAM $SS DISSECTING FORMED: THUG REED HASTINGS/JAY HOAG/GOLDMN SACHS
      by singhlion2001 . Jan 30, 2013 9:03 PM . Permalink
      DUMP SIGNAL FLASHING: BIGGEST FRAUD TRIANGLE WITH 3 SCAM $SS DISSECTING FORMED: THUG REED HASTINGS/JAY HOAG/GOLDMN SACHS

      GET THE $UCK OUT OF BIGGEST FRAUD LOOT TRADING PIT ON USA FRAUD STREET CASINO

      THIS CRIMINAL MF NEXUS SCAM GANG IS PROTECTED BY PRESIDENT OBAMA AND ALL WATCH DOG AGENCIES IN USA

      ALL SCAMS PUT TO SHAME IN HISTORY OF USA WALL(NOW FRAUD) STREET CASINO HISTORY
      Ouch! The Netflix Price-Change Hangover [View article]
      Reed Hasting's is a carnival barker, a mountebank, a flim-flam man, a charlatan and a confidence man. The CFO left the company in January, because he was aware of the fake accounting at NFLX, the lies and the false hype. The Head of investor relations left 3 months ago, because she could no longer lie, about the companies activities and accounting. Both left before any investigation into accounting, or investigation into the manipulation of the stock by hedge funds begins. Goldman Sachs, Morgan Stanley. JP Morgan, Piper Jaffray and many other financial institutions have been colluding to manipulate this stock thru proprietary trading in their hedge funds. Goldman Sachs picked NFLX as their latest Ponzi Scheme, because Reed Hastings is just the perfect Machiavellian con-man. Lloyd Blankfein And Reed Hastings are as thick as thieves. It was Goldman Sachs that forced Facebook executives to add Reed Hasting to their Board of directors, to manipulate the stock price. Reed Hasting is a false Messiah, in league with Goldman Sachs, deceiving Americans, and The indolent regulators who have been paid off by Goldman Sachs. The SEC directors are bribed by Goldman not to do their job, with promises of $4 million a year jobs after they leave the SEC, at banks, the very banks they are supposed to regulate. The SEC is corrupted and compromised by Goldman Sachs, "the Great Deceiver"
      =========================================

      John Malone is Media Mughal and why he refuse to take Disney content at price tag, which Criminal Thug was willing to pay?

      Liberty Media has plenty of cash vs MF Reed Hastings turned Netflix balance sheet to Insolvency in 2011 to cash out fraud loot from scam bubble creation in 2010/11 and massive stock option abuse continues to loot more and Key crime Partner from Technology Cross ventures Jay Hoag , who looted billions from NETFLIX scam Short Squeeze Bubble Planning along with Barry McCarthy & Reed Hastings and Jay Hoag is still on Board of Directors and enjoying free loot along with rest of the scam Gang.

      Technology Cross ventures is Biggest Nexus scam Gang connected to Goldman Sachs Crime syndicate Network in Silicon Valley

      NETFLIX from day one listing on USA Wall Street Casino has been used by this scam Gang to loot billions via Concentrated Holding and controlled Trading float and lending Short and executing planned short Squeezes for over many tears but Major fraud was planned in Dec2009 to execute Streaming hype fraud and $200M Debt has been used in 2010 , Line oF Credit at Wells Fargo and entire Cash Flow to play this fraud and massive loot in Billions cashed by nexus scam Gang:

      INSIDERS SCAM GANG LED BY REED HASTINGS, BARRY McCARTHY/TECHNOLOGY CROSS VENTURES AND THEIR WALL STREET KEY CRIME PARTNERS GOLDMAN SACHS AND MORGAN STANLEY

      THESE CRIMINAL GANG CASHED BIG TIME BEFORE REVEALING BALANCE SHEET INSOLVENCY IN OCT 2011 AND NEW FRAUD SUDDEN FUNDING DEAL IN A RUSH WITH $200M IN A VERY CLEVER 2018 ZERO COUPON FRAUD FROM FREE LOOT AT TECHNOLOGY CROSS VENTURES NOW UNDER CONTROL OF BARRY McCARTHY(EX CFO) AND THEY ROPED IN NEW SCAM PARTNERS AT TROWE PRICE WITH $200 WORTH STOCK TO PLAY NEW SHORT SQUEEZE SCAM IN EARLY 2012 AGAIN. After that we 2 new Short Squeeze scam recycling in 2012 and this fraud Recycle by this Nexus scam Gang continues.........GOLDMAM SACHS is key crime partner in 2012 too with their fraud derivatives and Manipulation "HFT" software at work and S.E.C CRIMINALS ARE STILL PROTECTING THIS SCAM GANG... WELLS NOTICE IS DIRTY TRICK BY ROBERT KHUZAMI./MARY SHAPIRO SCAM GANG AT S.E.C. to silence whistle Blower like me, these criminal Gang at S.E.C. is bed with scam gang at GOLDMAN SACHS

      GOLDMAN SACHS trading in Netflix has to be Audited by FBI & Criminal Division at DOJ.

      This Fraud in Netflix trading pit has put ENRON/WORLDCOM /MADOFF scams to shame........and still continues.............

      Now back to LIBERTY MEDIA/STARZ and John Malone Question:

      John Malone is Media Mughal and why he refuse to take Disney content at price tag, which Criminal Thug was willing to pay?

      Focus on this from the article:
      Why Did Starz Turn Down Disney?

      However, the deal has a major downside: its cost. While Netflix declined to give any financial details regarding the terms of the agreement, the L.A. Times reported that it could run as much as $300 million per year. Janney Montgomery Scott analyst Tony Wible wrote in a report seen by NBC that the firm would “not be surprised if (Netflix) would need to raise capital.”
      Liberty Media’s (NASDAQ:LMCA) premium cable channel Starz decided on Tuesday not to renew its exclusive licensing agreement with Disney, partly because of the prohibitive price. As The Wall Street Journal said on Wednesday, Starz will be looking for a potential buyer as soon as Liberty Media spins off the company in early January. Sources told the publication that “Some buyers wouldn’t want to take over a company that’s burdened with giant cost increases.” Disney’s new terms could have resulted in annual fees of $300 million, $100 million more than under Starz’s previous deal.
      For Starz, which will be solely dependent on original programming and content from a deal with Sony (NYSE:SNE) once its Disney contract expires, securing a potential buyer is of utmost importance. Its networks have struggled to compete with Time Warner’s (NYSE:TWX) HBO and CBS’s (NYSE:CBS) Showtime in recent years.

      Sentiment: Strong Sell

    • CARL ICAHN #$%$ LOOT $600M+ IN 8 WEEKS with MF criminal Thug Reed Hastings scam $ss insolvent poop wipes and How much did MF criminal thug Reed Hastings Inner Circle scam gang looted since 2010/2011/2012 and now in 2013????

      And Reed Hastings nexus scam gang raped company Balance sheet with buy Back scam bubble creation using $200M Debt in 2010 and balance sheet became insolvent in OCT 2011 and new quick Fraud $400M funding fraud with Barry McCarthy Zero Coupon 2018 fraud scam and $200M from TROWE PRICE new partner in crime gang member. DO you folks know that how Much Barry McCArthy/Reed Hastings/Jay Hoag(TCV) loot with this new fraud funding?

      AND BALANCE SHEET is again Insolvent Jan 24, 2013.

      Sentiment: Strong Sell

    • BIGGEST SCAM LOOT WITH ALL FRAUD COOK BOOK/MASSIVE PRICE VOLUME MANIPULATION FRAUD IN NETFLX TRADING PIT CONTINUES WITH FULL PROTECTION PROVIDED BY ALL WATCH DOG AGENCIES AND HIGH TREASON CRIMINAL RULERS IN USA....ALL SCAMS PUT TO SHAME by criminal Thug Reed Hastings scam gang

      FBI/DOJ/S.E.C/FINRA all working fro FRAUD STREET BANSTER FINANCIAL TERRORIST IN USA

      99% Are history in USA without revolution: RED ALERT IN USA

      ANOTHER FRAUD $500M OFFERING JUST AFTER 1 YEAR AGAIN: WHAT WAS SCAM "E' REPORT AND SCAM LOOT PUMP FOR DUMPS PROVEN CRIMINAL THUG REED HASTINGS SCAM GANG IN USA?

      THIS CRIMINAL GANG RAN OUT OF CASH IN OCT 2011 AND SHOULD HAVE BEEN ARRESTED THAN AND SCAM POOP PAPER DELIST-ED BUT THESE CRIMINALS AT S.E.C. PROVIDE PROTECTION & FRAUD WEAPONS FOR MORE LOOT

      CARL ICAHN #$%$ LOOT $600M+ IN 8 WEEKS with MF criminal Thug Reed Hastings scam $ss insolvent poop wipes and How much did MF criminal thug Reed Hastings Inner Circle scam gang looted since 2010/2011/2012 and now in 2013????

      And Reed Hastings nexus scam gang raped company Balance sheet with buy Back scam bubble creation using $200M Debt in 2010 and balance sheet became insolvent in OCT 2011 and new quick Fraud $400M funding fraud with Barry McCarthy Zero Coupon 2018 fraud scam and $200M from TROWE PRICE new partner in crime gang member. DO you folks know that how Much Barry McCArthy/Reed Hastings/Jay Hoag(TCV) loot with this new fraud funding?

      AND BALANCE SHEET is again Insolvent Jan 24, 2013.

      Sentiment: Strong Sell

      • 1 Reply to singhlion2001
      • THIS BIGGEST CON-MAN AND BLUFF MASTER IN HISTORY CORPORATE INSIDER CRIME GANG IN USA IS MF PROVEN CRIMINAL THUG REED HASTINGS: This criminal bought out all Watch dog agencies and white house to run hi PONZI LOOT SCAM a new $30Billion plus scam loot alreasy and still very strong going for loot here.....
        ---------------------
        Can Netflix Take on HBO?
        By Meghan Foley | More Articles
        January 30, 2013
        Page 1 of 2
        In Netflix (NASDAQ:NFLX) Chief Executive Officer Reed Hastings’ mind, no one should have to spend $150 on a monthly cable bill and no one should have to wait to watch a television show’s next episode or next season. That is why he is attempting to “become HBO faster than HBO can become” Netflix. As he told GQ, this will solve what he sees as the primary problem with modern entertainment: that all it delivers is “managed dissatisfaction.”
        “The point of managed dissatisfaction is waiting. You’re supposed to wait for your show that comes on Wednesday at 8 p.m., wait for the new season, see all the ads everywhere for the new season, talk to your friends at the office about how excited you are,” he explained to the publication.
        Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!
        To offer a wide breadth of content, which Hastings hopes will make $150 cable subscriptions and Time Warner’s (NYSE:TWX) HBO unnecessary, Netflix will produce its own content. The company’s chief content executive, Ted Sarandos, aims at making at least five original programs per year, according to The Verge. He currently has $300 million in his budget, which has enabled the streaming-video provider to create its first original programming lineup: House of Cards, Orange Is the New Black, Hemlock Grove, a second season of Lilyhammer, and the fourth season of Arrested Development. House of Cards is set to start airing on February 1, and it cost Netflix $100 million just to hire Fight Club’s David Fincher to direct the series.
        This method may be too costly to be sustainable, as GQ said, but it is an important way around Netflix’s content problems and its competition with HBO, the rival most feared by Hastings. “They are becoming more Netflix-like and we are becoming more HBO-like,” he told Gigaom back in December of 2011. The main problem with HBO, according to Hastings, is that the network is the only company other than Netflix with the “stomach” to spend one to two billion dollars a year on content. HBO already produces its own content.
        But as the Fiscal Times reported, “Netflix’s library of streaming content simply isn’t as all-encompassing as its DVD rental library once was.” Netflix’s content has been under analysts’ microscope recently, as the company has gained and lost numerous licensing agreements. In September of last year, it lost its exclusive contract with Epix for new movies from Paramount, Lionsgate and MGM. It also lost access to Starz’s (NASDAQ:STRZA) Disney and Sony (NYSE:SNE) movies earlier in 2012, and A+E Networks pulled its content in late September. However, recent deals inked with Time Warner and The Walt Disney Company (NYSE:DIS) should offset the losses slightly. However, Amazon (NASDAQ:AMZN), one of Netflix’s main competitiors, has made its share of content acquisitions as well. Its Prime Instant Video library now holds more than 33,000 titles.

        Sentiment: Strong Sell

    • NETFLIX(NFLX) fraud loot in billions
      Exposed Insider Enrich Scam by Netflix Insiders and their Wall Street Partners
      All Watch Dog Agencies in USA have been tested and they are Protecting Massive loot by Netflix Insiders and Goldman Sachs/Morgan Stanley led scam Gang since 2010/11/12 & now 2013. All Fraud facts proven but S.E.C criminals provide full protection and Blocking my caller ID and harassing me instead.

      ELISSE WALTERS/MARY SCHAPIRO/ROBERT KHUZMAI/ROBERT COOK/GORDON FULLER/JOHN RAMSEY ARE PROVEN CRIMINALS AT S.E.C.

      Scam Update 2013
      Accounting Smoking
      SCAM PLAY BOOK
      No Banker in Jail?

      MARY SCHAPIRO/ROBERT KHUZAMI/ROBERT COOK/S.E.C. CHIEF COUNCIL SCAM GANG IN FLEE MODE VIA RESIGNATIONS AND WHY?

      ELISSE WALTERS SCAM GANG AT S.E.C. STILL PROVIDING FULL PROTECTION TO REED HASTINGS/GOLDMAN SACHS LED SCAM GANG. WHY MARY SCHAPIRO, ROBERT KHUZAMI SCAM GANG FLED FROM S.E.C VIA RESIGNATIONS? THESE CRIMINALS KNOW THEY CAN NOT HIDE THIS SCAM TOO LONG NOW AND LYING WITH FRAUD SPIN INTERVIEWS IN THE MEDIA TO USA 99%

      THE ENTIRE NEXUS SCAM GANG HAS BEEN STRIPPED NAKED, AND ALL FRAUD FACTS ARE PROVEN BUT THE SCAM LOOT STILL IS FEARLESS IN MANIPULATED SCAM TRADING PIT: HOW & WHY?????

      MY CALLER ID BLOCKED AT S.E.C. BY ROBERT KHUZAMI/MARY SCHAPIRO SCAM GANG AND CRIMINALS OPENLY SAID, WE WILL BLOCK YOU, DELETE YOUR MESSAGES , YOUR WHISTLE BLOWING CAN GO TO HELL

      Sentiment: Strong Sell

 
NFLX
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