Netflix Is A Fragile House Of Cards [View article]
I clearly showed in my valuation analysis that even if the company does turn things around -- this stock is still grossly overvalued. Price is what you pay, value is what you get. With this stock you're paying a great price, but not getting much value for your money.
Netflix Is A Fragile House Of Cards [View article]
Lets say I did include the additional debt the company is taking on. The financial condition would look even worse, not better! It would not change my conclusion at all. Believe me, a company that is profitable and in great financial health doesn't need to keep taking on more debt.
I fully expect the company to take on even more debt this year, they simply don't have the money to fund their capital expenditures. When I say capital expenditures, I also mean the money spent on acquiring streaming content.
If you believe that Netflix is profitable, cheap and in good financial health then you are delusional, my friend.
The Truth About Robin Raina's Ebix: Part I [View article]
Buying those calls is not a very good idea. Something like a straddle play is much better, in my opinion. The stock might go up, it might go down. Nobody can predict the short-term direction. However, there will be huge volatility, which you can profit from if you are smart.
The Truth About Robin Raina's Ebix: Part I [View article]
Even if this report was false, this stock is still not a buy. The stock is not cheap at all if you understand anything about accounting. Most of the growth has come through acquisitions. In fact, all of the growth is through acquisitions (the worst kind of growth). This is probably because the company cant achieve organic growth because of a terrible business model. Some investors have been saying that the company has good free cash flow. This is also wrong! Since the company makes lots of acquisitions -- those acquisitions should also be treated as CAPEX, which would give this company much lower free cash flow in most years.
Netflix Is A Fragile House Of Cards [View article]
"If they earn $4 in 2014," that is about 21 months from today's date. "If" they somehow earn that amount (very unlikely), the stock will still have a ridiculous valuation. There is simply no way to justify the current price, in my opinion.
The Truth About Robin Raina's Ebix: Part I [View article]
Anybody who is willing to compile a report this detailed is most likely onto something. In other words, investors should probably listen and take him/her seriously. EBIX is making lots of acquisitions, which makes it easier to hide a lot of fraudulent activities. So it wouldn't surprise me if the fraud allegations were true. All of those who are pissed at the author for writing this article are probably delusional shareholders who have lost a lot of money. When Enron was accused of fraud the same thing happened -- shareholders simply refused to believe it was true. I guess history really does repeat itself.
Netflix Is A Fragile House Of Cards [View article]
Thank you for the comment!
Many companies in the technology industry have "hidden" liabilities. Like I said before, they come up with clever ways to keep them off the balance sheet. This fools most investors into thinking that these companies are financially healthy, which they are not. Think about it, if Netflix was so financially healthy and profitable, why do they have to take on more long-term debt? The $500 million in additional debt (which will appear on next quarters balance sheet) is just the beginning, trust me. I expect this company to add billions in long-term debt over the next few years. They have to do this because they can't pay for their content acquisitions. Yes, they are reporting positive net income (but only a fool would trust those numbers). Like I showed in my analysis -- for the most recent year the company lost approximately $124 million, but reported positive net income of $17 million. The difference here exists because amortization and depreciation are a lot lower than CAPEX. Eventually even net income will be negative. By then it will be too late for most investors to get out of this stock.
Netflix Is A Fragile House Of Cards [View article]
I don't want any company to fail. It would mean that a lot of people would lose their jobs, which is never a good thing. However, when it comes to investing you must stay rational. Investing in Netflix is dangerous at the current valuation.
Netflix Is A Fragile House Of Cards [View article]
The Truth About Robin Raina's Ebix: Part I [View article]
Short Charter: Chapter 11 Is Coming [View article]
The Truth About Robin Raina's Ebix: Part I [View article]
Netflix Is A Fragile House Of Cards [View article]
Netflix Is A Fragile House Of Cards [View article]
Netflix Is A Fragile House Of Cards [View article]
I fully expect the company to take on even more debt this year, they simply don't have the money to fund their capital expenditures. When I say capital expenditures, I also mean the money spent on acquiring streaming content.
If you believe that Netflix is profitable, cheap and in good financial health then you are delusional, my friend.
The Truth About Robin Raina's Ebix: Part I [View article]
The Truth About Robin Raina's Ebix: Part I [View article]
Netflix Is A Fragile House Of Cards [View article]
The Truth About Robin Raina's Ebix: Part I [View article]
Netflix Is A Fragile House Of Cards [View article]
The Truth About Robin Raina's Ebix: Part I [View article]
Netflix Is A Fragile House Of Cards [View article]
Many companies in the technology industry have "hidden" liabilities. Like I said before, they come up with clever ways to keep them off the balance sheet. This fools most investors into thinking that these companies are financially healthy, which they are not. Think about it, if Netflix was so financially healthy and profitable, why do they have to take on more long-term debt? The $500 million in additional debt (which will appear on next quarters balance sheet) is just the beginning, trust me. I expect this company to add billions in long-term debt over the next few years. They have to do this because they can't pay for their content acquisitions. Yes, they are reporting positive net income (but only a fool would trust those numbers). Like I showed in my analysis -- for the most recent year the company lost approximately $124 million, but reported positive net income of $17 million. The difference here exists because amortization and depreciation are a lot lower than CAPEX. Eventually even net income will be negative. By then it will be too late for most investors to get out of this stock.
Netflix Is A Fragile House Of Cards [View article]