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Netflix, Inc. Message Board

  • singhlion2001 singhlion2001 Sep 27, 2013 7:19 PM Flag



    Most of Netflix’s streaming licenses range from less than one year to three years. In fact, as of Q2, 39.8% of Netflix’s total $6.4 billion content liabilities were for less than year and 45.0% were for 1-3 years. The company recently stated that original content currently represents about 5% of its $3.0 billion on-balance sheet content library (book value), or about $150 million […] The company currently amortizes all content costs, including original content, on a straight-line basis. As the content is amortized, Netflix reduces the value of its on-balance sheet liabilities, though the asset value remains unchanged through the life of the contract. Content amortization is included in, and makes up the vast majority of, the company’s reported cost of streaming. Backing out the reported streaming amortization from the cost of streaming yields “other” streaming costs (mostly technical costs), usually $110-120 million per quarter. One can then take additions to the streaming content library from the cash flow statement less changes in content liabilities to arrive at the cash amount paid for streaming content. Adding this cost back in place of the amortized cost yields a “cash” gross profit figure. As outlined below, cash gross margins have ranged from 8-15% over the past seven quarters.

    what EBITDA is? wrote:
    “A” stands for “amortization” which is what 90% of Netflix costs are, so NFLX trades at about 3.5X EBITDA, or less. No wonder these clowns can’t properly value businesses, they have no idea what they’re talking about. Their lack of understanding how much of “Domestic Growth” comes from declining DVD subs and foreign subs accessing the US site via VPN is also telling. There is no US growth in streaming it is saturated and has been for a while. They are barely beating inflation for the past 2 years.
    This stock is for FRAUD CASINO gamblers only:

    Wow, you are not ‘Investing’ in this stock – you are purely gambling (and the odds are stacked against you). I mean, you have to look at the long list of powerhouse companies competing against Netflix, like Apple, Google, Facebook, Amazon, and dozens of others in the streaming market – that’s a LOT of competition. Then there is the concern about costs of content, it’s a fact that nobody can deny – even Netflix itself confirms that it’s an issue. Then there is the one thing that would REALLY Bother me if I had my money invested (gambled) in this company – and that is the way that they are very secretive about some aspects of their earnings reports (like certain subscriber numbers being omitted), it just seems like they are using some very creative accounting to keep the growth story alive & the stock price high. One slip up and there is going to be a LOT of money lost on this one
    The “big boys” invest your 401K, Savings and Pension Money on these types of “investments”, Wall Street keeps the confidence game moving along with the parade of absurd upgrades so that they can get their 2% management fee on the “value” of the investments and more IPO work, underwriting opportunities, etc.

    No one believes this will ever return $310 to shareholders, ever. It is a shell game/musical chairs, whatever you want to call it, and when the music stops, you can’t claw back those 2% asset management fees, those were “earned”.

    Sentiment: Strong Sell

    This topic is deleted.
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