Netflix: No Thanks - We'll Have Level 3 Instead
Focus Equity • 61 Comments
Focus Equity • 61 Comments
Mon, Oct. 24, 8:06 AM
- Netflix (NASDAQ:NFLX) announces that it plans to sell $800M in senior notes.
- The company says it will use the proceeds for a variety of purposes, including potential content acquisitions, capital expenditures, investments, working capital and other strategic transactions.
- NFLX -0.30% premarket to $127.12
- Source: Press Release
Wed, Oct. 19, 6:18 PM
- Netflix (NFLX +2.6%) has countersued Twenty-First Century Fox (FOX +1%, FOXA +0.6%) in an employment dispute, claiming that the latter's fixed-term worker contracts are unenforceable.
- Fox had filed an uncommon tampering suit against the streaming giant in September, saying Netflix had poached two executives under contract (Tara Flynn and Marcos Waltenberg).
- At the time, Netflix said it would mount a vigorous defense. And it now says Fox is bullying employees with "take it or leave it" deals that amount to "involuntary servitude," and that it will be aiming to recruit more of Fox's employees, even as its entertainment-industry stature grows.
- "Through its widespread use of unlawful restrictive fixed-term employment agreements, Fox is facilitating and enforcing a system that restrains employee mobility, depresses compensation levels, and creates unlawful barriers to entry for Netflix and others competing in the film and television production business in violation of California Business and Professions Code Section 16600," Netflix's action says.
Tue, Oct. 18, 12:53 PM
Tue, Oct. 18, 9:16 AM
Tue, Oct. 18, 8:22 AM
- Netflix (NASDAQ:NFLX) is on track for a monster opening move after blasting past subscriber growth estimates with its Q3 report.
- "Investors appear laser focused on subscriber growth, and so long as Netflix delivers on that metric, investors will bid its shares up," observes Wedbush analyst Michael Pachter.
- While Pachter is preaching caution on Netflix due to the high cost of developing new shows, there are plenty of high-flying bullish views pouring in from Wall Street. Price targets from Loop Capital ($133), Royal Bank of Canada ($150), Pivotal Research ($155) and Goldman Sachs ($140) imply the Netflix party might go on for a while.
- On the Netflix conference call, management said it has no plans for a price increase.
- "We don’t want to get overconfident because we had a good couple of years," noted CEO Reed Hastings with an eye on his competition.
- Netflix earnings call transcript
- Previously: Netflix beats by $0.07, beats on revenue (Oct. 17)
- Previously: Netflix soars after blasting past subscriber growth estimates (Oct. 17)
- NFLX +18.89% premarket to $118.65. Shares haven't traded over $110 since last April.
Mon, Oct. 17, 5:36 PM
Mon, Oct. 17, 4:14 PM
- Netflix (NASDAQ:NFLX) announces it brought in 370K net subscribers in the U.S. during Q3. The company guided for 300K U.S. and the consensus estimate from analysts was for a mark of 304K. Last quarter, Netflix added 160K domestic subs.
- Net international subscribers growth came in at 3.2M vs. 2.0M consensus.
- Total Netflix memberships at the end of the quarter were 86.74M
- Q3 total streaming contribution margin rose 120 bps Q/Q to 18.8%. The contribution margin rate in the U.S. came in at 36.4% The company sees a Q4 U.S. contribution margin of 36.9%.
- Guidance for Q4 is for 520K U.S. adds and 3.75M global. The combined mark is ahead of most estimates.
- Netflix says it has now "un-grandfathered" 75% of its members.
- In an important twist, the company says it plans to use existing online service providers in China as partners due to the challenging environment.
- Q3 shareholder letter (.pdf)
- Netflix earnings interview webcast via YouTube
- NFLX +19.5% after hours to $119.53.
Mon, Oct. 17, 4:08 PM
Sun, Oct. 16, 5:35 PM
Sat, Oct. 15, 12:15 PM
- Netflix (NASDAQ:NFLX) investors will need to steady themselves Monday after the bell with the company due to report on Q3 earnings.
- Post-earnings swings up or down of 10% or more have been relatively common for the streamer after subscriber growth numbers have either impressed or raised concerns.
- What to watch: Netflix guided for 300K net subscriber adds in the U.S. and 2.3M globally for Q3. What sets up Netflix for some frenzied trading late on Monday is the wildly varied estimates from investment firms on sub growth and average pricing after factoring in churn, price hikes, ungrandfathering, etc. On the financial side, analysts expect Netflix to post revenue of $2.28B and EPS of $0.06 for the quarter.
- Conference call preview: Don't expect Netflix management to directly answer any questions about acquisition talks (AAPL, DIS, TWX), rather the nuanced answers to progress in key international markets and margin expectations will be in the spotlight.
- More Netflix reading: Potential Netflix Acquirer, Part 2: Fox? Comcast?, Why It's Time To Short Netflix (And Chill), Market Challenge: Netflix In The Spotlight
Fri, Oct. 14, 2:54 PM
- Piper Jaffray is out with the results of its annual Taking Stock With Teens Survey. The top brands listed by the 10K teens included in the survey are posted below.
- Top clothing brands: Nike (NYSE:NKE) 29%, American Eagle Outfitters (NYSE:AEO) 9%, Forever 21 5%, Ralph Lauren (NYSE:RL) 4%, Urban Outfitters (NASDAQ:URBN) 3%.
- Top handbag brands: Michael Kors (NYSE:KORS) 34%, Kate Spade (NYSE:KATE) 19%, Coach (NYSE:COH) 10%, Louis Vuitton (OTCPK:LVMHF) 5%, Longchamp Vera Bradley (NASDAQ:VRA) 3%.
- Top footwear brands: Nike 51%, Vans (NYSE:VFC) 9%, Converse 7%, Adidas (OTCQX:ADDYY) 6%, Steven Madden (NASDAQ:SHOO) 2%.
- Top restaurant chains: Starbucks (NASDAQ:SBUX) 14%, Chipotle (NYSE:CMG) 11%, Chick-fil-A 10%, Taco Bell (NYSE:YUM) 3%, Panera Bread (NASDAQ:PNRA) 3%, McDonald's (NYSE:MCD) 3%, Olive Garden (NYSE:DRI) 3%.
- Nothing earth-shattering in the tech results, dominating teen mindspace are Snapchat (Private:CHAT), YouTube, Instagram and Netflix (NASDAQ:NFLX).
Thu, Oct. 13, 3:18 PM| Thu, Oct. 13, 3:18 PM | 35 Comments
Mon, Oct. 10, 8:53 AM
- Deutsche Bank issues a Sell rating on Netflix (NASDAQ:NFLX) on what it sees as an unfavorable risk-reward profile after the recent runup in share price (+9% in two weeks).
- The investment firm thinks the market is setting expectations too high for the next four years.
- NFLX -1.49% premarket to $103.26.
Wed, Oct. 5, 11:32 AM
- Netflix (NFLX +3.2%) is at almost a six-month high as speculation of interest by Disney or Apple continues to make the rounds.
- The buzz this week was initiated by investment firm Baird and then grew a life of its own -- although a closer scan doesn't show much of substance in the note from analyst Will Power (judge for yourself below).
- On Netflix M&A, Power wrote, “whether Disney, Apple or someone else, Netflix could become a target.”
- Netflix is up over 8% for the week.
- Previously: M&A talk lifts Netflix (Oct. 3)
Wed, Oct. 5, 8:08 AM
- Netflix (NASDAQ:NFLX) will screen original movies at iPic Entertainment locations in L.A. and New York City under the terms of a new 10-picture deal.
- The agreement is the first time Netflix has partnered with a theater chain on a longer-term deal.
- IPic, which operates about 15 multiplexes, is one of the innovators of the luxury theater concept.
- Financial details of the revenue-sharing agreement weren't shared.
Mon, Oct. 3, 4:14 PM
- Today's strength in Netflix (NASDAQ:NFLX) is being attributed by some traders to a note from Baird that pointed to an increase in M&A talk about the company, including chatter about Disney making a move. Shares of Netflix rallied 4.14% to close at their highest level in four months.
- Netflix is due to report earnings on October 17 when the focus will return back to global subscriber growth and margins.