The buzz hasn't worn off quite yet for Netflix (NFLX) with shares up 36.2% premarket to sail...

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skibimamex Comments (276)
 
He may "hold" his position, but that doesn't mean that he can't start hedging some of it. Great trade for Icahn.
24 Jan, 09:09 AM Reply Like

skibimamex Comments (276)
 
JPM just upgraded NFLX this morning --- while he was neutral when stock was in $50's a few months back. We'll see other analysts jumping on the bandwagon too after the horse has already left the barn. This will get overdone relatively quickly as we get the mother of all short squeezes.
24 Jan, 09:15 AM Reply Like

JeffreyLangBoyd Comments (509)
 
When you say you think it will get overdone quickly do you think it will plunge or will it just go sideways for a good long while?
24 Jan, 10:10 AM Reply Like

skibimamex Comments (276)
 
I think the shorts will get squeezed as the operating momentum continues near-term, but then by summer when the seasonality comes into play, the short thesis will gain popularity again and the stock may retrace significantly. Q4 and Q1's gross adds are Q2's churn, and Q2 doesn't have the gross adds to outrun the seasonal churn echo. So you'lll get the "OMG, see Netflix can't grow because the market is totally saturated and look at all the fearful competition." IMO, not really the case of course, but that will again become the prevailing market perception, and the stock will likely retrace, by grinding down as some folks lose conviction and take profits, not a cliff drop IMO.

Good luck. I am long but not a trader. In for the long-haul.
24 Jan, 11:47 AM Reply Like

JeffreyLangBoyd Comments (509)
 
Very interesting situation. I always like it when companies surprise the market as that is kind of the way it should work in a Reg. FD environment. Not that it hasn't always really been that way but the analysts in general looked pretty foolish.

I was surprised/disappointed that there are no international expansions planned in the near future. Sure they know better than me but I really wanted see them move into continental Europe sooner rather than later. Will be interesting to watch.
24 Jan, 12:13 PM Reply Like

skibimamex Comments (276)
 
Resource allocation issue. I'd rather that they compete aggressively to get the Sony-Columbia Pictures output deal (the last two of the Big 6 up for renewal this decade are Sony and WB, and I doubt that WB will be allowed to seek bidders away from HBO).

It's not the end of the world IMO to wait until back-end of 2013 or early 2014 for the next launch (it's supposed to be France I think - somehow I thought that had launched already or rumored to launch imminentley. that works as NFLX already has familiarity with French titles and lanugage in UI from Canada).

By year-end US streaming will be 30%-50% higher contribution than domestic DVD, and remaining international burn would be 1/2 of current (i.e. under 60/mm a quarter), then they can pop out a new country launch once every 6 months (assume $60MM loss in initial quarter of launch for the big ones such as France and Germany) and expand out to the core of Europe.

But I think incremental dollar to secure US dominance and add the next sub where US is already at scale is far more financially rewarding and that excess return can then be invested in foot print expansion.
24 Jan, 12:39 PM Reply Like