33 million subscribers and growing fast. Every million subs adds $100 million in annual revenue. If NetFlix stops growing, then we have a problem. But it that is not the case.
The point that shorts miss is that NetFlix's costs are almost all fixed costs. They do not vary with the number of subscribers. So each marginal subscriber adds more and more to the bottom line. NetFlix's margins grow with each new subscriber.
I realize that NetFlix is spending more and more on content. But that content is driving growth and paying for itself.
It seems like you've got the exact opposite.
NFLX's content costs are most almost all variable costs. They go up as subscribers grow, but DO NOT go down if subscribers shrink.
Look at NFLX net tangible assets on Balance Sheet, it's getting more negative (and I'm not even counting the off-balance liabilities)
They do not own the content library, they pay to use them, that's why it's listed as intangible assets, but those debt obligations are real negative future cashflows.
I for one point, thinks if NFLX stops growing, they are probably fine, they just need to do a couple secondary to stay afloat. But if they do grow and face competition (or one mis-step) later, they are in deep deep trouble.
All this also applies to the competition so then it all comes down to who can deliver the best shows at the best price and remain profitable and the stock market is telling us Netflix is winning hands down.