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Netflix: Volatile, Trendy and Out of the Dog House


Given its a boom-to-bust-to-boom again comeback, it would be easy to draw parallels between famous movies and the website Netflix (NFLX), which shows them. Die Hard, Rudy, maybe even one of the Rocky films might suffice to describe it, given that this latest iteration of its life is certain not to be its last.

By surprising analysts in its latest quarter by delivering a small profit where a small loss was expected due to an 8% increase in its U.S. online subscriber base, Netflix has once again demanded investors to take a look and rethink their opinions, via a 40% intraday rally that has pushed the stock to levels not seen in 16 months.

"I think it has some more room to run here," says Eric Jackson, founder of IronFire Capital in the attached video, explaining that we have yet to see the impact of analyst upgrades, short covering and finally profit taking. "So I think for the next couple of weeks this thing could continue to go, and it could potentially go a lot farther than that. If we've seen anything with Netflix it's that once momentum breaks a certain way, the thing can go for a long long time."

Jackson not only calls the latest quarter "unquestionably good" but goes out of his way to salute CEO Reed Hastings for navigating the ship through rough water the past year, as well as Carl Icahn, who he says ''looks like a genius" for taking a 10% stake at an average of $58 a share.

Going forward, investors will be watching to see how Netflix's premier attempt at producing its own content will go, given the imminent launch of its show House of Cards. This historic event has already attracted outsized attention, Jackson says, since Netflix will make history by releasing an entire season all at once, rather than on a week-by-week basis.

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"That's really unheard of, and it will be interesting to see what the reaction is to that and how the public responds to that and whether it sets a precedent for the new world of internet TV that we live in," he says.