Overvalued Netflix: Too Many Great Expectations [View article]
I agree completely about the ARPU estimates being too aggressive. Further reason to believe the current valuation can't be satisfied by future earnings.
look, world oil consumption is growing 2% a year, set to hit 90M bpd in 2012 and ALL this growing demand is being met by higher cost forms of supply. So producers have to ask for a higher price or they can't operate. And oil demand is pretty sticky, so consumers pay up. It's pretty simple.
FX and money supply issues don't seem to be impacting Natural Gas all that much do they?
As for speculators, perhaps they are making these speculative investments because they see that fundamental market conditions create a long-term bias in toward higher oil prices!
gasoline prices have increased just as much in countries where the currency has remained strong. The increase in gasoline prices is due to tight supply.
DSR and FOR Consistent with Continuing Economic Recovery [View instapost]
vvvveeerrrryyyy interesting. the correlation to the economy is obvious: lower mortgage payments = more discretionary income and higher consumer spending.
BUT if you added real energy costs (mainly gasoline) as a debt service item, I doubt we would be nearly as close to historical lows.
its not that people won't use the service. they do and will, especially during difficult periods. Its a growth problem. I don't see anyway Netflix can add enough subscribers to satisfy its multiple.
And competition is going to be a real problem. there are alot of big names moving into the space. Its not like the old days of brick-and-mortar rentals. Location and convenience means nothing. Very hard to maintain a dominant market share in this case.
Facebook Has Me Flip Flopping on Netflix [View article]
by my very rough math, NFLX must have over 600 million subscribers worldwide by the year 2026 to satisfy its current market price. this assumes they simply continue with their exisiting business model of $7 monthly subscription.
Now, of course, they are getting into content, which I think is a huge mistake. It is not a growth driver: they will still charge a monthly fee subscription. It is a cost item for them and it is a much more risky proposition. As their current content providers begin to see NFLX as a competitor rather than a customer, they will pull content from NFLX ... and NFLX will be exposed to the same, almost random, hit or miss nature of producing a hit show. So they've got increased uncertainty of revenues and its probably gonna cost alot more than they realize too.
then there is the whole thing of competition. NFLX has a head start in streaming to be sure, but as mentioned in the article, what happens when the real big players such as Apple, A mazon, Google, and Facebook start to pry their way in. Sony has their own streaming service with the Playstation.
All these players have high brand awareness and internet traffic that could easily steal from NFLX's pie. Not too mention resources. All those companies are 10x the size of NFLX.
NFLX reminds me of a Nintendo/Sega or RIMM. They were the first mover and had tremendous growth ... but that inevitably attracts players with deeper pockets and broader customer bases than you.
SGI: The Magical 1% Growth Momentum Stock [View article]
this is a very compelling argument here. Thank you so much for the info. Truly good shorts are hard to find and I think you may have one here.
The worry here is how long can the CEO continue to mislead before he bites the bullet and has to show real numbers. Could be awhile and the stock could maintain momentum over that time. Shorting is risky business!
Overvalued Netflix: Too Many Great Expectations [View article]
Overvalued Netflix: Too Many Great Expectations [View article]
Rail Traffic Takes Expected Holiday Dip [View article]
Money Supply Growth Alert [View article]
FX and money supply issues don't seem to be impacting Natural Gas all that much do they?
As for speculators, perhaps they are making these speculative investments because they see that fundamental market conditions create a long-term bias in toward higher oil prices!
Money Supply Growth Alert [View article]
Story Stocks, Part 2: Why I'm Bearish on Netflix and Research In Motion [View article]
Story Stocks, Part 2: Why I'm Bearish on Netflix and Research In Motion [View article]
DSR and FOR Consistent with Continuing Economic Recovery [View instapost]
BUT if you added real energy costs (mainly gasoline) as a debt service item, I doubt we would be nearly as close to historical lows.
Netflix Keeps Rising [View article]
And competition is going to be a real problem. there are alot of big names moving into the space. Its not like the old days of brick-and-mortar rentals. Location and convenience means nothing. Very hard to maintain a dominant market share in this case.
Facebook Has Me Flip Flopping on Netflix [View article]
Facebook Has Me Flip Flopping on Netflix [View article]
Now, of course, they are getting into content, which I think is a huge mistake. It is not a growth driver: they will still charge a monthly fee subscription. It is a cost item for them and it is a much more risky proposition. As their current content providers begin to see NFLX as a competitor rather than a customer, they will pull content from NFLX ... and NFLX will be exposed to the same, almost random, hit or miss nature of producing a hit show. So they've got increased uncertainty of revenues and its probably gonna cost alot more than they realize too.
then there is the whole thing of competition. NFLX has a head start in streaming to be sure, but as mentioned in the article, what happens when the real big players such as Apple, A mazon, Google, and Facebook start to pry their way in. Sony has their own streaming service with the Playstation.
All these players have high brand awareness and internet traffic that could easily steal from NFLX's pie. Not too mention resources. All those companies are 10x the size of NFLX.
NFLX reminds me of a Nintendo/Sega or RIMM. They were the first mover and had tremendous growth ... but that inevitably attracts players with deeper pockets and broader customer bases than you.
RIM's Grim Earnings Reality [View article]
SGI: The Magical 1% Growth Momentum Stock [View article]
SGI: The Magical 1% Growth Momentum Stock [View article]
The worry here is how long can the CEO continue to mislead before he bites the bullet and has to show real numbers. Could be awhile and the stock could maintain momentum over that time. Shorting is risky business!
SGI: The Magical 1% Growth Momentum Stock [View article]