!. Initially the stock declined because buy-out mania had it excessively valued. 2. Then management bungled Joe Banks by abolishing their brassy but proven marketing. 3. The decline from $20 to $10 I view as investor abandonment plus broad market correction. Good luck.
Is this a $150 stock or a $20 stock? We will find out shortly.
Having abandoned its 'huge movie library' strategy the Company is now using the member site to promote some of the great products in their inventory. Score: plus.
Original content investment has been a bust. Yes, there have been several Holly wood insider awards. But NOT ONE Netflix original program is a 'must watch' or even close. Score: negative.
Netflix is topping out domestically. Maybe international thirst will be better.
My mind remains open to that possibility.
'They' - conspiracy theorist weird. Learn the market. Learn when and when not to play. Learn 'they' is cover for ignorance.
WAY back when George Zimmer fitted me. We talked. Great guy. Great merchant. But times change. Saving this turkey from its management and their IB cronies is different. Think Icahn. IMHO.
Netflix is still basically profitless and struggling cash-wise. So what to do? You can take a flyer (in either direction; short more risky) or play short-term or stay on the sidelines talking.
Talk can be wise. Not often, but in this case . . .
This is nonsense. Check the record. Joe Banks management made great profits. They grew their company, sans debt no less. They were incredibly successful for years. They had used the same promotional practices nearly the entire time. Suddenly MW takes over all and the new management blames an inevitable faltering of Joe's promotional approach. What transparent nonsense. You may not have liked Joe's promotions, but they worked. When current management tried to overlay the bureaucratic market approach, failure followed.
Ditto observation at this end. RE international growth: Americans want #$%$ mysteries, Asians Hollywood, Brits shows with decent weather.
Hypothesis. Netflix created their 'Original Content Model' because competing for third party content with bigger players was suicide and they had no option. They did stem cash bleed. But profit and cash flow are still dreadful. Their 'Original Content Model' has been a bust to date, not one 'must see' program despite the insider hoopla. One option is limited PPV a la Amazon. But if they admit that Original Content has been disappointing, what differentiates them from Amazon?
'Seriously oversold' by definition is a minority viewpoint, in this case (as usual) with a backdrop of questioned viability. I agree with you. Management and their Investor Banker rookies have swamped the company with debt and wrecked lots of customer loyalty. Both occurred at Penney's. But this is not JCP. JOSB was solid. So was George's operation. Today's company has good locations, good suppliers, good rules and good employees.
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.