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Netflix, Inc. Message Board

  • perfusion68 perfusion68 Feb 22, 2013 3:33 PM Flag

    If Apple offers to buy over the weekend? 250 or more what do you think

    there is a price associated with leadership in your space

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    • Just a realistic question. Why would Apple buy NFLX? They could have bought them 7 or 8 months ago for half the price. At that time their was less competition, less content costs, etc. It would also seem to canabalize the iTunes business. They make a lot of money on iTunes on movie rentals and movie purchases. They don't have all of those huge content costs, and make big margins.

      I personally do not believe that Apple shareholders would approve a deal to buy NFLX. Look at the major shareholders of Apple. Do you think Einhorn would sign off on them wasting that much cash on a company that is not making money, has huge debt obligations, most likely has fraudulent books, a dying delivery business, and an out of this world P/E ratio. If they bought them out it would be at 20-30% premium which would further exacerbate the P/E ratio.

      This is a business model with low barriers to entry, and no real assets. If cook is smart, which so far he has not proven, he would wait until these cable companies are on their knees and negotiate a huge deal with the content producers, similar to what Jobs did with the music industry. The more players that get into this business, whether successful or not, they will drive up content costs. Soon NFLX will be battling INTL, CSTR, AMZN, GOOG, and AAPL for content. A buyout could happen, but I doubt it.

 
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