Counter: Look at broad retail. This is a sector problem not unique to Kohl's. Even clothier stocks (not particularly internet vulnerable) are way down. So back to the question: is this 'X-mas ain't coming' retail sector jitters or recession fear?
I tend toward the latter. Reasoning: The Fed's prolonged Zero Interest Rate policy has caused malinvestment of unknown dimensions. This is now the majority view, which means Fed policy will change. The US economy has never so strung out. Big institutions are uncertain what will happen. So they are retreating, particularly from retail which would bear the first brunt of economic slowdown.
I might also point out that retail sector 'X-mas ain't coming' jitters (which often present spectacular buying opportunities) usually occurs in late summer.
Nonetheless I think it's a buy opportunity for market stalwarts like Kohl's. Best case you get a 30% intermediate term gain. Worst case you own a no growth dividend stock.
11X PE. Earnings yield 9%. Dividend yield 4%. Typically a great buy point for KSS. Either we are (1) heading into recession or (2) we have value in a commonplace 'Christmas ain't coming this year' retail jitters market. Counter arguments?
You may not have liked Joe's pitch, but the Company was very well managed running with good growth, no debt and great profits for years. The problem is current management and their investment banker friends.
You are an idiot. Put more kindly: learn economic and finance. Netflix despite its many failings offers dirt cheap entertainment. Right now they have a monopoly. That gives them pricing power.
Like it or not, Netflix offers value - millions of hours of programming. People are bored. People don't want to pay more for 'smarter' programs. They don't care about ideas or art or innovation. So they buy Netflix. It is the market. At some point people will offer better ideas which people are willing to buy. It is called free market. This stage is transitional.
It beats dictatorship.
There's no 'guessing' RE Netflix dropping their best movies and trying to hold/build viewership using original content. They have said that is their strategy. They cannot afford both.
Will the big step back in movie library quality (already a fact) cause mass cancellations? I don't know. Netflix's low price favors them. True, they haven't had any 'must see' original content hits. But their service is dirt cheap. Viewers may prefer Netflix junk movies (and the occasional hit) to paying $3 to stream a top movie from another source. It may be that quality movies isn't their niche - that teenage horror movies and child programming is where the money is.
Netflix adopted the 'we want to be HBO' strategy because they realized content providers would whipsaw competing streamers. Amazon and Apple (both moving to some original content) seem to agree.
Netflix's original content strategy has always been suspect. It's hubris thinking a product distributor and succeed creatively. But even if their original content never scores any big 'must see' hits (a la HBO landmarks) the combination of junk movies, teen horror, child programs and marginal original content may be enough.
Seems to me they still have options.
Start with two stable highly profitable no debt companies. Enter investment bankers. Soaring buy-out offers. Go in debt. Crash earnings. Eliminate Joe Banks' proven (though crass) marketing model.
I didn't have a play here - having gotten out when stock prices got way too high. But I have invested in both companies for huge gains over the years.
Netflix is cheaper (and better value) as you say. But their recent acknowledgement that they've been cancelling top movies to focus resources on original content is perilous. They have yet to produce any compelling original content.
I got dropped the stock years ago too - but not before making several hundred thousand dollars with it. Fire up the Cessna!
I agree the loss of EPIX is huge. My analysis: (1) 2-3 years ago they realized that content provider liabilities would never allow decent profits. (2) Ergo they had to shift business models. They have quietly discarding some of their highest quality content and the associated liabilities ever since. (3) The EPIX divorce has such huge content implications they had to get 'out front' about taking the plunge.
Net-net: Hastings wasn't just BS-ing about trying to make Netflix into an HBO. He has bet his company on it.
'Money always goes where it's treated best.'
Aphorisms are no substitute for intelligence.
Oops - another aphorism.
I suspect none of Netflix's original content (except for Orange) has attracted many subscribers - despite what Netflix claims. Being able to stream Breaking Bad probably has ten times of the impact of the lot.
Despite what you think, price and content go together. Existing content providers refuse to provide many top films at prices Netflix can afford. Would you pay a little supplemental (say a buck a movie) for top quality older films? I would. I think that is the fiscal reality of making such films available.