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Netflix, Inc. (NFLX) Message Board

  • annm_90638 annm_90638 Aug 18, 2013 3:43 AM Flag

    Netflix Might Be Twisting Its Cash Flow Statement

    Netflix Might Be Twisting Its Cash Flow Statement
    Aug 18 2013, 03:06 by: Shmulik Karpf | about: NFLX (Netflix, Inc.) 23:29

    All investors know that they must conduct a rigorous analysis on a company's cash flow statement before making any serious investment decision. The statement of cash flow in the financial report is usually a much better gauge of the financial position of a company than the standard EPS. I believe that Netflix (NFLX) is playing suspicious accounting games with its cash flow statement. And it's very important for investors to be aware of that.

    Netflix reported its quarterly earnings after the trading session on July 22nd. The company beat analysts' forecasts with $29 million in profit, or 49 cents per share, and up from $6 million a year earlier. Analysts on average expected $0.40, according to Thomson Reuters. Revenue for the quarter was $1.07 billion, up 20% from $889 million a year earlier.

    In a letter to shareholders, Reed Hastings, the company's CEO, stated -"Our Product Innovation teams greatly enhanced the features and delivery of our service during the quarter, as well as improved discovery and merchandising of our content library."

    It's no coincidence that Hastings emphasizes the importance of the content library to the company. It's the company's main asset and the source of the lion's share of profits. It's the most essential part of Netflix's business.

    The tricky part

    Part of Netflix's business is to purchase DVDs in bulk and then rent them out to its end users. The proper way to account for this massive purchase is to record it as an asset on the balance sheet, and record the cash expense under "cash flow from operating activities," because this purchase naturally falls under the company's normal, ongoing business operations.

    Netflix, though, does not think that way. While the company recorded its library as an asset on the its balance sheet, it refrained from recording the expenses accrued by it as an operating cash expend

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    • It is not a Enron resurface fraud, BTW no Auditor questions about this issue.

      So just be it.

    • If you can figure it out this easily, it's not particularly complicated fraud.

    • Dear Mary

      This is in brief for first phase of loot by Organized Nexus scam gang led by Reed Hastings/Goldman Sachs scam gang. Second phase started in Sep 2011 through 2013. And again is crystal clear with concentrated holding and same scam play book continues but this time criminal thug Reed Hastings has no cash for buy backs and desperately playing new scam by removing massive content , which he cannot afford now.
      Same scam gang keeps funding him without looking at financials and why? $35 Billion fraud loot and funding?

      Here is the time line of Netflix exact scam planning by Reed Hastings/Barry McCarthy & Technology Cross ventures Inside Gang in collaboration with Goldman Sachs & Morgan Stanley.

      NFLX has been in DVD by Mail business model till Dec, 2009.And their Subscription offering price created real profitable business model. Late 2009 Reed Hastings was able to secure Streaming rights to STARZ & SONY content on a short term
      Contract in 2009. As of January 2010, Netflix shares had 35% + short interest out of 52 Million shares. Majority of shares were held by Technology Cross Ventures/Insiders, Goldman Sachs, Morgan Stanley and Fidelity. Now these concentrated holders actively trading were also in the game of lending shares short and exactly this information must have been shared before planning a short squeeze by this nexus gang. Also look at Balance sheet and Cash flow in 2010/11. $200M debt was raised at 9.75% before executing their short squeeze scam Bubble creation.

      This scam plan was discovered after carefully studying Goldman Sachs/Morgan Stanley Fraud research reports by Ingrid Chung and Scott Devitt plus Netflix 10K SEC Filings

      Please Check all pricing of subscription offering by Netflix as DVD by mail till 2009. And then check new pricing offering of new Combined DVD by Mail plus Streaming subscription offering in 2010 at $8.99. This subscription pricing and Research reports from Goldman Sachs/Morgan Stanley with their Earnings estimates and target prices did not add up. Even Time Warner CEO made comments on CNBC, Math does not add up?
      This is when many Traders and investors started questioning Accounting at Netflix and Earnings estimates by Goldman Sachs, Morgan Stanley and all other Analysts in 2011.
      Also Reed Hastings nexus scam gang PUMP/DUMP news spins became very bizarre and all of their PUMP/DUMP news Blitz were and are still very aggressively promoted via all Media sources and Manipulated trading pit on Exchanges reflected with bizarre pricing/volume moves on trading exchanges…. Fraud Manipulation via price/volume and crystal clear still continues without any fear?
      Reed Hastings/Barry McCarthy/Jay Hoag at Netflix were aggressively using all debt and Free cash flow for buy backs along with Short squeeze scam by Goldman Sachs & Morgan Stanley. This is when I and many other started warning S.E.C about:

      COOK BOOK SCAM
      INCREASED SUBSCRIPTION OFFERING BUT STILL MATH DOES NOT ADD UP
      CHANGED BUSINESS MODEL FRAUD FROM MOVIE STREAMING TO OLD TV SHOW CONTENT AND WHY? BECAUSE COULD NOT AFFORD EXECLUSIVE CONTENT LICENSING RIGHTS AS CONTENT BECAME TOO EXPENSIVE DUE TO HIS OWN SCAM CONTRACTS BY OVER PAYING FOR CONTENT THAT HE COULD NOT AFFORD LONG TERM
      PRICE/VOLUME MANIPULATION
      WEEKLY DERIVATIVE WEAPON is the most deadly Fraud weapon for fraud manipulation, introduced by S.E.C. after 2008 Crash and being heavily used by this scam gang

      Insider were massively cashing out at peak of scam bubble in 2011 and yes this nexus gang had cashed out before the crash in July 2011 before reporting earnings. As per our warnings about Financials at Netflix and Fraud Research Reports by Goldman Sachs/Morgan Stanley proved all our fraud charges against this nexus scam gang.

      CFO/COO/IR all quit before this disaster earning reports.CFO Barry McCarthy resurfaced at TECHNOLOGY CROSS Ventures where this nexus scam gang has over $2B+ in fraud loot parked.

      After this earnings in July 2011 all PUMP/DUMP spin lies by Insiders at Netflix and Pure Fraud research reports by GOLDMAN SACHS/Morgan Stanley and rest of analyst proved to be pure ponzi hype fraud for loot in Billions by Nexus Scam gang.

      This class action has all details too:
      Questions:
      Netflix insider Content Licensing obligations hidden off Balance sheet in Billions
      Why Insiders abused and used all cash for Buy Backs, when company had already accumulated huge content obligation Bills in Billions?
      Why were these insider criminals massively misleading investors by using Analysts and media for pumping, when they were cashing out before reporting Financial Disaster they created?
      Balance sheet was insolvent as of July 2011 as predicted in our warnings to SEC and Goldman Sachs/Morgan Stanley research reports proved to be pure fraud spins to loot Billions by Manipulating Trading pit by Concentrated holding entire float and short squeezing with Buy Back by insider scam gang and GODLMAN SACHS used massively derivatives for fraud bubble to continue so long and benefitted most by buying calls and selling puts.

      If FBI & Criminal division at DOJ does audit of concentrated scam gang holders trading in Netflix, I bet the loot in Billions will shock the Nation.

      I STILL PREDICT NETFLIX WILL BE BANKCRUPT WITHIN 2 YEARS AND FRAUD BUSINESS MODEL CAN NOT SUSTAIN BUT SHOCKINGLY SAME SCAM GANG IS AGAIN PUMPING FRAUD REASERCH REPORTS BY MORGAN STANLEY/GOLDMAN SACHS/JP MORGAN BANKSTER FINANCIAL TERRORISTS IN USA WHERE AS NETFLIX WAS AGAIN INSOLVENT AS OF JAN2013 EARNING FRAUD SPIN .13 CENTS PROFITS AND FRAUD SHORT SQUEEZE WITH FRAUD VOLUME/PRICE MANIPULATION AGAIN
      REAL FACTS EARNINGS REVEAL INSOLVENCY AGAIN AND WE HAVE NEW FRAUD FUNDING BY SAME SCAM GANG VERY QUICKLY LIKE THEY DID IN 2011?

      WHY THERE IS NO LAW FOR ANALYST FRAUD RESEARCH REPORTS IN USA?
      THEY NEVER GO TO JAIL FOR THEIR FRAUD IN USA?

      Sincerely

      Sentiment: Strong Sell

    • "SEC" CRIMINALS AND NETFLIX FRAUD LOOT IN BILLIONS :Netflix Might Be Twisting Its Cash Flow Statement
      Netflix Might Be Twisting Its Cash Flow Statement
      -------------------
      RED ALERT IN USA: NETFLIX FRAUD LOOT & "SEC' CRIMINALS COVER UP FRAUD: ACCOUNTING RULES HELP NETFLIX HIDE MASSIVE LOSSES ACCOUNTING RULES HELP NETFLIX HIDE MASSIVE LOSSES
      RED ALERT IN USA: NETFLIX FRAUD LOOT & "SEC' CRIMINALS COVER UP FRAUD: ACCOUNTING RULES HELP NETFLIX HIDE MASSIVE LOSSES ACCOUNTING RULES HELP NETFLIX HIDE MASSIVE LOSSES
      In recent years, Netflix's management has been attempting to disguise the company's terrible fundamentals by boasting about things such as "subscriber growth" and "new content deals" they have made. Personally, I try to ignore this managerial propaganda by reading the SEC filings in order to analyze the company's true profitability and financial health.
      The first thing I want to examine is Netflix's deteriorating profitability. I will focus on the data from 2007 onwards, because this is the year streaming was introduced. In the table below, I provide the annual revenue, net income and free cash flow numbers over this time period:

      (Click to enlarge)
      Just by taking a quick glance at the numbers in the table, we can see that Netflix used to be an enormously profitable business. However, even as early as 2010, there were some red flags that would have told us that the good times would not last long. In order to fully understand why Netflix was so profitable in the past, and why this kind of financial performance is not likely to repeat, we must first study the way the company acquires and amortizes content.
      This table compares the amortization of content to the actual cash spent to acquire the content:

      (Click to enlarge)
      Note that from 2007 through 2009, the two amounts parallel each other closely, which makes sense: the amount Netflix spends to acquire content should be amortized over time. In fact, over these three years,the amount amortized is 89.4 percent of the total amount spent acquiring content - again, what one would expect, given that amortization should lag cash outlays in a rapidly growing business.
      However, starting in 2010, these two numbers diverge sharply, as Netflix began paying large amounts for content. In 2010, acquisition costs rose just over 106 percent (from $257M to $530M),

      Sentiment: Strong Sell

    • Hope there are no accounting procedures against the legitimacy. That is too obvious for people to read into it.

    • I read that tonight as well! Holy cow! Singalong was trying warn people! The stock is going down hard as my peewee on Monday!

 
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