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Netflix, Inc. Message Board

  • schweitz31 schweitz31 Jul 26, 2011 9:42 AM Flag

    Netflix Growth Problems

    Netflix's previous growth projections are not attainable. Two consecutive quarters of lower guidance for a momentum stock means that explosive growth won't be occurring.

    Netflix expects to add as few as 190,000 subscribers or as many as 1.29 million subscribers in the current quarter. Either figure will be a falloff from the 1.9 million subscribers added in the April-June period, which propelled Netflix's total customers to nearly 25.6 million. In last year's third quarter, Netflix added nearly 2 million subscribers.

    If the growth falls on the lower end of management's estimates, it would represent the lowest number of subscribers that Netflix has picked up during a three-month stretch since the second quarter of 2008 when it added 168,000 customers. Back then, Netflix only operated in the U.S. It now has 1 million Canadian customers who subscribe to the Internet streaming service. The company plans to expand into Latin America later this year.

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    • The writing was clearly on the wall months ago when I first posted this. Note the date. Too bad some NFLX longs did not pay attention.



    • tech and abatulis: Nice job locking in any profits today with NFLX. Take profits when they come because with this stock they can disappear in a matter of hours as you probably witnessed today. NFLX is a volatile stock and it is easy to get burned here. Money can be made with options on the way down if a trader knows how to time it right. I am fairly confident that there was a short squeeze today which the hedge funds and institutions accelerated with some buying. I am sure that retailers investors bought in as well, believing that NFLX was a good buy or value at the 250 level. But this stock is owned by the big funds.

      Moving forward, I still have a smaller put position left that I might add to later. Good idea to wait on the sidelines to strike abatulis. If you hear about HULU being acquired in the news or a public report of a secondary offering (rumored to be a possibility), then it might be a good time to get more puts. Despite today's afternoon reversal, I am not convinced that NFLX will be moving back to the 280's or 290's by the end of the week. We might se some sideways trading for a while. The big institutions understand that NFLX has weaker growth projections and is more vulnerable than it was in previous quarters. Competition is increasing by the day. The studios and cable companies won't just sit by idly as Netflix steals the spot light and distributes all of the major video content. Netflix has a big red bulls eys on its back.

      Tech: I like Obama's capital gains plans and hope that the hedge funds will have to pay a higher percentage, an ordinary tax on their carry as you said, instead of giving these fat cat hedge funds a tax break as many Repblicans support. Our country is broke. The middle class is under incredible financial stress. The upper class should be called upon to shoulder a higher percentage of tax revenue. The disparity or gap in wealth between the upper class and the lower classes is growing. The U.S. debt can't be reduced to 4 trillion by tax breaks alone. It won't happen. Some tax increases are needed to accomplish the 4 trillion mark and assure the credit markets around the world that the U.S. is serious about reducing its debt. I hope that the the mortgage interest deduction is not elimiminated because distressed Americans sorely that tax break. I don't want to see it get eliminated. Good luck with your trades.

      Tech: Sorry to hear you were on the wrong side of Amazon today.

    • Schweitz31 I appreciate your work. You bring some reality to this nuthouse. Do you think the run from 251-267 was all short covering or was there buying on the dip? I closed all my short positions at $254 and made a profit. I am going to stay on the sidelines for awhile. I might get back in if this pig cracks 300 real quick. So much manipulation here. Any thoughts on what might happen in the couple of months.

    • I sold some of my Aug puts but not all. I did just fine thank you. Funny that NFLX longs are getting cocky today after yesterday's earnings miss and lowered guidance. NFLX is still very vulnerable. Don't kid yourselves. No guarantee that NFLX will keep going up and up.

      A HULU acquisition will clearly drive this bloated stock lower. Today, Walmart entered the streaming market. Competition will be fierce for NFLX. Cash flow negativity and higher churn are still the big white elephants in the living room. This momo stock and its Wall St. pumpers do not want to pay attention to the hard facts. Fundamentals do still matter.

      • 4 Replies to schweitz31
      • Schweitz:

        I pressed and gave up almost 1/3 of my gains today. Such is life. I am going to let this run tomorrow then come back in. I honestly believe this is broken and the Street knows it. They are just trying to keep it high until the debt deal so the can selloff to naive momo retail.

        Hedgies are setting up the biggest long squeeze in history. Money from the sidelines that comes back in is going to get crushed, coming in at the top. All the Wall Street price targets increase and upgrades are full of crap, done to protect the institutions and scew individuals.

        The hedgies are just sticking it to Obama because he wants the to pay ordinary income tax on their carry instead of the much lower capital gains rate.

        I also got hammered on AMZN tonight. I'm going to stick with that as well. In short, I think the games have done REAL damage to the economy. We were headed for a soft patch. Now, we are headed for a double dip. I'll save the diatribe until later, but if checks don't go out, a vicious cycle starts and we don't have the resources to stem the bleeding this time.

        Full disclosure: long AAPL, CSCO, INTC, GOOG. NSPH Short NFLX, AMZN, LULU, CRM

    • The difference in the amount of new customers is because of the amount of lost customers they will have this quarter. That number is the true unknown.

    • You better find another company to knock....probably still short your one share.
      Goofiest board ever..

    • I don't care about the B.S. self-serving Wall St. upgrades today.

      NFLX's guidance headed into next quarter are still lowered. I don't like this stock's rich valuation and questionable fundamentals moving forward. Cash flow is negative. Subscriptions are stalling due to the rate hike. Competition is rising. And CEO Hastings still does not want to take any pointed questions from analysts.

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