I find this fascinating - Netflix, Inc. (NFLX) CEO Reed Hastings has written a polite, thorough reply to hedge fund manager Whitney Tilson, who published his detailed short thesis on NFLX last week. Readers can read both letters and evaluate the situation, but I find Hastings' reply very interesting, simply because it's pretty unusual for a CEO to respond to a short seller like this.
"The next issue is what Whitney calls our “weak content.” While Whitney may think “Family Guy” is weak content, our subscribers do not. Furthermore, our huge subscriber growth to date has been built on this “weak content,” so imagine how much upside we have as we improve our content, as we are always trying to do. I think what Whitney may be misunderstanding is that at $7.99 per month, consumers don’t expect to have everything under the sun. A variant of this misunderstanding is when DirecTV (DTV) advertises against Netflix, calling out some Netflix content weaknesses. When an $80 per month service is picking on an $8 per month service, the $8 per month service just gets more attention from consumers and grows even faster."
In a stream of consciousness list form, my personal thoughts on NFLX would look like this:
Disclosure: I have no position in NFLX.