Seeking Alpha
  • J Mintzmyer
    I'm thinking of throwing in the towel on my $AMZN short and rolling it all into a massive (hedged) $NFLX position maybe -40%+ of portfolio.
    8/20/13
    Reply (18)
    • ciolan: what would be the catalyst for $NFLX collapse this time? Icahn jumping?
      8/20/13
    • ciolan: I lost a lot of money shorting LNKD when making historic highs, some 50 points lower than today's position.
      8/20/13
    • J Mintzmyer: I'm there with you on $LNKD was almost 2x hedged from $120-$210 though, so my adj. cost basis is close to $200. $NFLX is popping on contract
      8/20/13
    • J Mintzmyer: news for 2016. Their income statements are going to start hurting from content expenses which will cut into their already thin equity.
      8/20/13
    • J Mintzmyer: It's basically '11 all over again. $NFLX is stronger, yes- but so is $AMZN. First will be tapering and mkt correction, 2nd will be Q3-13.
      8/20/13
    • J Mintzmyer: $NFLX is $16B- basically a platform intermediary between content providers and subs. Sure people are 'cutting tv,' but they still need inet.
      8/20/13
    • J Mintzmyer: Compare to other content providers-- Lionsgate is under $5B, Dreamworks under $3B, AMC is under $5B,
      8/20/13
    • ciolan: That makes sense, but their next earnings announcement is October 23, a long time from now, it may be 300 by then
      8/20/13
    • J Mintzmyer: If you go by enterprise value calculations and assume contracts are similar to debt, than $NFLX has an enterprise value of well over $20B...
      8/20/13
    • J Mintzmyer: That's $500+ per subscribers that are netting them $96/yr on tiny or perhaps even negative margins.
      8/20/13
    • RobbyRob: I concur. Taper and inevitable market regression to mean. Short whole market or highfliers.
      8/20/13
    • Timothy Phillips: Yes - the dilution has been massive (15%) since the last time they crossed $300. So $271 is a new valuation record.
      8/20/13
    • Timothy Phillips: I agree J ... NFLX is a massive short here .. trading at 3.9x revenue. They need to deliver $20/sub at this price, and they do $1.67 now.
      8/20/13
    • Timothy Phillips: J - I am short NFLX, but you can't count content contracts as debt in EV calc. The content is amort against rev, and is paid by rev not CF.
      8/21/13
    • Timothy Phillips: Counting contracts as debt is equivalent of counting lease contracts as debt - doesn't make sense as it is a future operating cost.
      8/21/13
    • J Mintzmyer: Good points- so proper EV is $16B. Think it's fair to count for a 'buyouts' or compete function though. The 'cost' would be $20B+.
      8/21/13
    • Timothy Phillips: The amazing stat you bring up is that $NFLX market cap is larger than AMC, dreamworks, and lionsgate combined!!!!
      8/21/13
    • RobbyRob: That is remarkable. I don't know what else to say...but the NFLX action is fascinating from an insane standpoint. Any humans trading today?
      8/21/13