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Netflix, Inc. Message Board

  • lifesweetingreencountry lifesweetingreencountry Dec 3, 2012 1:42 PM Flag

    Two Ways to View Netflix - at least

    Anti-Netflixers: Current cash flow, meager subscription growth and thin margins point to Netflix nearing bankrupcy soon. Big Amazon and Verizon are hot on their heels. Nobody will buy loser Netflix. The Icahn move is opportunist Pump & Dump. Future stock value: $40 at best.

    Pro-Netflixers: Current finance while weak is stable. Netflix is market leader with a big head start. The Icahn move isn't about a buyout. He is lobbying the 10 institutions who own 50% of Netflix to get stubborn Hastings to implement PPV current movie streaming or pasture him. PPV could bring $5/sh to the bottom line. Future stock value: $80 will look cheap.

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    • According to Yahoo major holders it shows Hastings at zero shares. If this is incorrect, sorry. But that is where I got the info....

      Sentiment: Strong Sell

    • Icahn said that Hastings was doing a good job but thinks Netflix would do better if acquired by a cash rich company. He also said that internet TV was the future. Comcast and DirectTV did not become big companies by offering PPV.

      Sentiment: Strong Buy

    • Not bad but you left out some stuff.

      NFLX accountants are HP's accountants who use "aggressive" techniques for the books.
      Hastings owns zero shares of NFLX
      There is no barrier to entry for streaming
      NFLX is losing market share in the USA
      The only money making part of NFLX is physical dvd rental which is a dinosaur.

      Sentiment: Strong Sell

      • 3 Replies to tagetlocman
      • There is no barrier to entry for streaming
        Why don't you start a streaming business, let me see how you manage ?
        Anyways that is not the point! Getting the content and relationship with studios is the barrier to entry. It takes years of asset and content building.. NFLX franchise is slowly getting stronger. I am sure PPV streaming will start soon as well. NFLX should also start Kiosk business

      • 'Aggressive' accounting techniques. I agree with you. It's the old CEO vs CPA argument about booking known liabilities versus anticipated revenue. Nothing like Exron.

        Hastings has zero shares. I'll bet that's one reason for Icahn's move. Uniquely, the entire Board has practically no ownership. Blackstone, Rowe, etc. do.

        No barrier to streaming. I agree. But it will take billions to compete with Netflix. Amazon eventually? Maybe. Verizon? I think that is probably a head fake.

        NFLX is losing market share. They have 27mm subscribers, twenty times the usage of the next competitor. How long? What do you think? A 24 month head start?

        Moneymaker DVD is a dinosaur. Absolutely true. I think Hastings was too cute by half trying to separate earlier.

        We probably are not far apart. I too am a bottom line finance type. But my sniffer says Icahn is in this for value. Hastings' stubborness not adding PPV is fact. My speculation about Icahn's forcing the PPV issue is guesswork. If Netflix's 27 mm customers bought just one PPV movie a month, that alone could bring megabucks to the bottom line. Netflix with its huge general access library plus PPV of current movies (no obligation to use PPV) would be a gorilla.

      • I think tagetlocman has the better argument. But lifesweet points are what the "smart money" NFLX long (oxymoron?) point to. Hence the nice options premiums.

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