Seeking Alpha
  • Rocco Pendola
    Wow, $NFLX. My June $40 puts might not be such a source of comedy after all. :-) #Netflix
    4/23/12
    Reply (40)
    • laundryanto: lol!
      4/23/12
    • Josh Krause: Doubtful. I don't see us breaching the lows. Even below 70 would be surprising.
      4/23/12
    • Jamie Smith: I called that one too...good job. You goin to sell the options and take the profit, or do you really think it could still go lower?
      4/23/12
    • Rocco Pendola: Well, if there is indeed a profit, I might just take it and move on. I need to hear the call see the action tomorrow first, but my initial
      4/23/12
    • Rocco Pendola: thought is that this is it. I wrote last year that we might not see an implosion until they actually reported a loss as opposed to saying
      4/23/12
    • Rocco Pendola: they would lose money. Reality needed to be on display. Maybe that's at play here, at least in part.
      4/23/12
    • Jamie Smith: I know I cancelled my netflix subscription and have not missed it.
      4/23/12
    • Rocco Pendola: They bungled the move away from DVDs. That is what will kill them. I will have an article that focuses on that soon. This is truly unreal.
      4/23/12
    • Jamie Smith: It was a good idea, but the quality was not good enough. They need more innovation. Just look at what eBay is doing with PayPal.
      4/23/12
    • Jamie Smith: That's why eBay went up 14% after reporting better than expected, and NFLX went down 16% after beating expectations.
      4/23/12
    • J Mintzmyer: Rocco, I always read NFLX press releases and then check the AM-OLD action to make sure it's rational (in my mind). Today I was shocked. I was
      4/23/12
    • J Mintzmyer: very impressed with NFLX Q1-12, I thought it would be much worse, yet the market still tanked them- I hit the jackpot AGAIN! Last qtr, their
      4/23/12
    • J Mintzmyer: results were much worse, but the mkt loved them... any ideas? Only huge negative is another 1M loss of DVD subs... Am I missing something?
      4/23/12
    • J Mintzmyer: Honestly the only bad "surprise" in the report is Comcast's domination of the net. Everyone with half a business brain knew LA would flop.
      4/23/12
    • Rocco Pendola: I tend to agree, but I have several reasons why I think they tanked. Will be writing something up for tomorrow probably.
      4/23/12
    • J Mintzmyer: Sounds good- I just hope tomorrow turns out well. I'm sitting on 300 97.5p and 500 85p. Nice little revisit to $70 would be appreciated!
      4/23/12
    • J Mintzmyer: The following day stair-step drop happened for the Q3-11 results, question is, will it happen again? I have doubts, hence 50% of $ @ 97.5
      4/23/12
    • bilton: It is the outlook you are missing. Read the appendix about churn in the shareholder letter. http://bit.ly/Ij0OE2
      4/23/12
    • bilton: They are calling it seasonality extension. Slim Shady's analysis is coming to roost.
      4/23/12
    • Rocco Pendola: Increased seasonality. What a load of crap. Amazing.
      4/23/12
    • Clayton Rulli: maybe youll get lucky and break even
      4/23/12
    • J Mintzmyer: You're saying maybe I'll get lucky? I won't "break even" unless NFLX immediately spikes to $90+ and stays there all week.
      4/23/12
    • Rocco Pendola: I think he means me. I am listening to the call right now. They answered one of my questions so far.
      4/23/12
    • J Mintzmyer: Apologies- I was a little rash on that one, I usually take a lot of heat for my suicide option approaches. Esp last quarter.
      4/23/12
    • bilton: It could happen if a value fund decides to take a long outlook and buy in the next few days.
      4/23/12
    • J Mintzmyer: Story seems silly though- NFLX's "best case" scenario is growing at the same rate (nominally, not in %) as 2010. Not a growth stock.
      4/23/12
    • theagen11: I am in June via $50 put options and it looks like you and I may make a killing!
      4/23/12
    • J Mintzmyer: Anyone notice the content liabilities increased by 229M while cash only increased by 7M? Cash/content coverage of 69.2%. Lowest since Sep 30
      4/23/12
    • J Mintzmyer: Ranged from 150% to 240% in 2010. NFLX was then $85 and financially stable. I say another secondary coming in fall for "more intl ex"
      4/23/12
    • BigJ1260: on call RH said 3 years to "fix" brand from Fall fiasco Then called the "seasonal" decline for Q2 in Subs a "mathematical artifact" LOL !
      4/23/12
    • Canary Cash: I can't wait for the article storm on this! Congrats JM on the 97s and 85s! I played leaps this time around and a tiny weekly strap :)
      4/23/12
    • Canary Cash: I think those 40s may work out Rocco, shorting NFLX is likely about to get pricey
      4/23/12
    • J Mintzmyer: Rocco, what's your take as an investor- will the call reassure the institutional bag holders or are all bets off tomorrow?
      4/23/12
    • Rocco Pendola: Honestly, I thought this was their best report in a while. That said, they're stuck in a rut now and the street realizes this.
      4/23/12
    • J Mintzmyer: Ironic that the 'best' report sinks 'em. Outlook is dismal tho- surprised no major banks have brought up the lqdity prob. Am I way off base?
      4/23/12
    • BigJ1260: Streaming Costs Q1 comps for 2010- 2011 - 2012 = the real "mathematical artifact ! $19M in 2010 , $86M in 2011 and now $340M this quarter !!
      4/23/12
    • Bill Maurer: See the bottom appendix for explanation of seasonality. http://1.usa.gov/Ijmhgg
      4/23/12
    • Rocco Pendola: Here's my take: http://seekingalpha.com/a/b58r
      4/23/12
    • John R. Conway: I agree Rocco, "Increased seasonality. What a load of crap" how are watching movies seasonal?
      4/24/12
    • bilton: They have always had seasonality but it was in the 2nd & 3rd quarters when people vacation and leave school for the summer
      4/24/12