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A Bearish Play on Netflix
by SHAM GAD
Despite Netflix's great growth over the past couple of years, the price appreciation of the company's stock appears to grossly overvalue the company against even the most optimistic of future scenarios. Though a simple short sale of the stock is one way to bet on shares heading back down to reality, the use of options may be a more advantageous method, even when the levered risks of options use are taken into consideration. My initial thought was that buying out-of-the-money puts would suffice. However, the extreme price volatility in Netflix shares has made its options very expensive. Trained to "sell" when prices are high, I'm suggesting instead the sale of calls. This strategy also has risks associated with it, so investors will want to consider the payoffs and risks of both trades, or a combination thereof. But first, a quick synopsis of why I believe shares are..
Arrest Mary Schapiro/Robert Khuzami/Robert Cook Scam gang at S.E.C
The grim picture of Netflix's financials starts with its debt. It has 2 types of debt, standard short-term and long-term liabilities on the balance sheet, as well as "Streaming Content Obligations" which reside off of the balance sheet.
Note current liabilities of $1,498,844,000 and accounts payable of $90,961 and this
Non-current content liabilities $829,163,000 ????????what you folks think about this??????
Long-term debt $200,000,000
Long-term debt due to related party $200,000,000
Other non-current liabilities $62,057,000
Total liabilities $2,790,064,000...jun30, 2012 more than doubled vs Jun 2011 $1,236,659,000
As for the off-balance sheet obligations, here they are:
The expected timing of payments for these obligations is as follows:
Less than one year $ 2,053,397,000
Due after one year and through 3 years 2,427,772,000
Due after 5 years 60,298,000
------Total streaming content obligations $ 5,023,748,000-----
So let's take a look at what Netflix owes within 1 year. It has accounts payable from the balance sheet of $90,961,000 plus $2,053,397,000 off the balance sheet. That's $2,144,358,000 that Netflix owes within a year. Plus, there's another $2,427,772,000 due between 1 and 3 years. If you are a Netflix shareholder and these numbers don't scare you, the next set probably will.
If you are a Netflix shareholder and these numbers don't scare you, the next set probably will.
First, let's look at the current assets and cash situation to see how far that will get Netflix in paying down that debt............
Now can you all show me what net income they generated in 2010? 2011? and now so far in 2012?
and they owe $2,144,358,000 within one year
Show me Cash flow and how this will be paid?
and also with $400M fraud fund raised with massive dilution cost to shareholder, tell me without these funds if this scam is solvent in 2012? Look Back fraud facts for you all
dilution hell already took share count over 58 million and with option grants will reach upto 62 million next.........
RED FLAGS: losing customers and the competition is rapidly increasing?
So what are Netflix's options? None of them is very appealing, there's a secondary offering, a sale of the company at a very low price, or bankruptcy. Maybe it could do a bond issue as well, but that would be issuing long-term debt to finance short-term debt. All of these choices are horrible for shareholders.
Sentiment: Strong Sell
e: PRICE/VOLUME SCAM=SEC CRIMINAL WEB SITE SAY REPORT?LOL
By singhlion2001 . Oct 12, 2012 2:51 PM . Permalink
FINAL WARNING TO S.E.C CRIMINALS AGAIN:
NETFLIX has zero assets to fall back on...
At least Enron had Gas supply contracts with utilities to be collected in Bankruptcy of Enron
NETFLIX goes bust....Zero Assets , No IP assets either
Just $5B+ Off Balance sheet accounts Payable Cook book scam and Debt on Balance sheet
BIGGEST INSIDER FRAUD STREAMING PONZI LOOT ORGANIZED NEXUS MAFIA GANG
RED ALERT IN USA: ((( Time to ARREST Mary Schapiro/Robert Khuzami/Robert Cook Scam gang at S.E.C in USA)))
ROBERT KHUZAMI CRIMINAL AT S.E.C. GAVE "RCB' AT 6% DROP TO CRIMIANL THUG REED HASTINGS SCAM GANG LED BY GOLDMAN SACHS FRAUD MANIPULATION "HFT" SOFTWARE
Senior Managers At Netflix Get Paid Regardless Of Performance
October 12, 2012
While investors wonder about the future, Hastings' salary doesn't depend on Netflix's business performance. Unlike most publicly traded companies, which often link a portion of executive compensation to specified targets such as the amount of revenue or earnings achieved, Netflix has taken the unusual move of granting its named executive officers only fully vested stock options. In 2011, Hastings received a $500,000 salary and stock option awards that the company estimates will be worth around $8.79 million whenever he decides to exercise them. While his monthly stock option allowance has decreased this year by 50% compared to what it had been in 2011, this won't likely dent his fortune. In addition to the above-mentioned salary in 2011, the CEO realized nearly $43 million that year by exercising 190,500 of stock options earned in times past.
Not only is Hastings' pay not linked to his performance, but his company's policies limit shareholder say on the boards' decision-making. For example, many companies allow their investors to vote and elect all their directors each year, but at Netflix three groups of directors are elected every three years so that investors vote only on a portion of the board every year. When a shareholder protested in recent months that a change to the system would enable Netflix investors to have more input on the directors' performance, the board responded that its existing system strengthens the independence of non-employee directors against the "often short-term focus of special interests." It remains unclear whether the board is referring to its minority investors as special interests.
Sentiment: Strong Sell
(Reuters) - Verizon Communications Inc (VZ) and Coinstar Inc (CSTR) said they will launch their video rental service later this month.
The joint venture, which will combine the Redbox DVD rental kiosk business with an Internet video offering from Verizon, would sell subscriptions starting at $8 per month for unlimited streaming combined with four one-night credits for DVDs.
"Starting later this month, Redbox Instant by Verizon will open to public beta and consumers will be invited to explore the service and enjoy their first subscription month free," the companies said in a statement.
The companies had formed the joint venture in February to sell video services aimed at competing against video rental giant Netflix Inc (NFLX).
Sentiment: Strong Sell
Wednesday, December 12, 7:34 AM Coinstar (CSTR) and Verizon (VZ) will launch Redbox Instant in an invitation-only beta phase this month with an official rollout planned for next year. For $8 a month, users can stream movies and select up to 4 DVDs per month from Redbox kiosks. An online store will also offer movies for rental or purchase. For now, the service appears to analyst to be only a minor threat to Netflix (NFLX), although the potential for bigger things down the road remains.
Sentiment: Strong Sell