Oct. 25, 2013, 12:48 PM
- A growing number of networks are reportedly saying they won't buy new shows from TV studios unless they can retain the streaming rights until the current season ends.
- FX and Turner are two of the networks which have drawn a line in the sand, according to Vulture.
- The actions from the networks are a calculated shot at Netflix (NFLX -1%) which has disrupted the ad model by striking lucrative deals with studios for early looks at TV shows.
- It's put pure heroin into the veins of studio executives," laments one network exec.
- Related stocks: CBS, DIS, AMCX, VIAB, TWX, CMCSA, FOXA.
Oct. 25, 2013, 8:33 AM
- FBR Capital starts coverage on a number of media stocks with strong endorsements.
- Disney (DIS), 21st Century Fox (FOXA), and Discovery Communications (DISCA) are all lined up with Outperform ratings on the premise wider content distribution channels will benefit the firms. Even Netflix (NFLX) gets some legs to run by FBR with a $350 price target.
- It sounds as if the investment firm might be a fan of the PowerShares Dynamic Media ETF (PBS) as well.
Oct. 23, 2013, 10:53 AM
- Down in AH trading yesterday following news Carl Icahn had pared his stake in half, Netflix (NFLX +0.1%) is now close to breakeven. Shares are still down 9% from where they traded going into the Q3 report.
- Icahn discussed his straight-forward rationale for the sale in a PR: "I have learned that when you are lucky and/or smart enough to have made a total return of 457% in only 14 months it is time to take some of the chips off the table." Reed Hastings, who just declared "momentum investor-fueled euphoria" has played a role in Netflix's run-up, might not argue too much.
- At the same time, Icahn's son, Brett (responsible for the Netflix investment), and fellow Icahn Enterprises fund manager David Schechter assert Netflix "remains significantly undervalued," and call its $7.99/month service "one of the great consumer bargains of our time."
- B. Icahn and Schechter estimate a $2/month price hike - not expected in the next two years, but seen as possible in the next five - and a doubling of Netflix's U.S. streaming base to ~60M (the low end of Hastings' estimated market size of 60M-90M) would yield an additional $3.3B/year in U.S. streaming contribution profit, even if Netflix raises its content spend by $1B/year.
Oct. 22, 2013, 5:16 PM
- In a new 13D, Carl Icahn discloses he has lowered his stake in Netflix (NFLX) to 4.52%. Icahn had nearly a 10% stake in the company when he first disclosed his investment a year ago.
- Shares are up over 4x since Icahn first bought in. He admitted earlier this month Netflix's run-up meant shares are no longer a "no-brainer."
- NFLX -2.2% AH after falling 9.2% in regular trading.
- Earlier: Netflix turns negative post-earnings
- Update: Icahn pared his stake in part by unloading 2.4M Netflix shares earlier today at $341.44. Shares are currently at $317 AH.
- Update 2: Icahn on Twitter: "Sold block of NFLX today. Wish to thank Reed Hastings, Ted Sarandos, NFLX team, and last but not least Kevin Spacey."
Oct. 22, 2013, 11:04 AM
- That "momentum investor-fueled euphoria" Reed Hastings (NFLX -4.1%) referenced in Netflix's Q3 shareholder letter is dissipating just a bit today, as investors take profits in spite of strong Q3 U.S. and international subscriber adds, and above-consensus Q4 EPS guidance. Evercore has upgraded shares to Equal Weight, but S&P has cut them to Sell.
- Two possible concerns: Hastings' remarks about "low quality" Latin American free trial promotions boosting Q3 international adds, and the fact free cash flow fell Q/Q to $7M thanks to major content investments. Of course, shares remain up 268% YTD.
- Janney's Tony Wilbe remains quite bullish, arguing shares could reach $700 with the help of continued sub growth and a $1/month price hike. JPMorgan's Doug Anmuth has raised his PT all the way to $460 from $340, and Needham's Laura Martin (Buy, $425 PT) thinks margin expansion is ahead of schedule, given Q3 margins hit estimates in spite of an extra $27M in amortization costs.
- CC transcript
Oct. 22, 2013, 9:14 AM
Oct. 21, 2013, 7:09 PM
- Q3 U.S. streaming margin was 23.7%, up 120 bps Q/Q and 450 bps Y/Y, and the division had a contribution profit of $166M (+10% Q/Q and +47% Y/Y). Netflix (NFLX) is guiding for a Q4 margin of 23.2%.
- The international unit had a $74M contribution loss in Q3 vs. $66M in Q2 and $92M a year ago, and a $65M loss is expected in Q4. But Q3 net adds totaled 1.44M, beating guidance of 550K-1.25M and raising the size of the international sub base to 9.19M. 900K-1.7M net adds are expected in Q4.
- Reed Hastings admits "low quality" free trial promotions in Latin America boosted Q3 international adds, and will pressure Q4 adds a bit.
- The DVD sub base fell by 360K Q/Q to 7.15M after declining by 470K in Q2. The business had a $107M contribution profit vs. $109M in Q2.
- Going forward, Netflix will amortize original content costs more quickly, due to the fact a large portion of viewing happens shortly after a show launches. Until now, shows were amortized on a straight-line basis over four years or the show's license period (whichever is shorter).
- Free cash flow was $7M in Q3 vs. $13M in Q2 and -$20M a year ago. Netflix expects Q4 EPS of $0.47-$0.73, above a $0.46 consensus.
- More on Netflix
Oct. 21, 2013, 7:04 PM
- Though rumors have been afoot that the NFL will try to sell TV rights to Netflix (NFLX) or Google, content chief Ted Sarandos asserted on the Q3 CC Netflix is still uninterested in bidding for sports content.
- On the other hand, the company is interested in documentaries, and is keeping an "open mind" on films, though the pay-TV window demanded by theaters makes things difficult.
- Netflix expects another 6M U.S. streaming net adds in 2014 on top of the 6M it expects to see this year. The company sees a 400 bps improvement in its U.S. streaming contribution margin each year.
- Reed Hastings insists there's "zero cord-cutting." Is he giving an honest take, or throwing a bone to MSOs the company is reportedly trying to strike set-top deals with?
- Hastings also admitted in the shareholder letter "momentum-investor-fueled euphoria" has contributed to the huge 2013 rally delivered by his company's shares. "Some of the euphoria today feels like 2003."
- Orange is the New Black is set to be Netflix's most-watched original show by year's end.
- Shares +10.8% AH to new highs. More on Netflix.
Oct. 21, 2013, 4:28 PM
- Netflix (NFLX) soars after posting strong Q3 results and setting the table for an impressive Q4.
- Binge viewing of hit shows such as The Walking Dead and Breaking Bad surely helped boost sub counts and again highlight the symbiotic relationship between content providers and the streaming service, while a healthy beat on international net adds shows the potential for global growth.
- The company thanks the cable industry for its openness, but notes it expects it will be "many years" before cable set-top boxes match Internet set-top boxes for NFLX streaming volume.
- NFLX shareholder letter
- NFLX +9.9% AH.
Oct. 21, 2013, 4:12 PM
- Netflix (NFLX) reports it added 1.29M subscribers in the U.S. during Q3, compared to a 630K gain for Q2 and guidance for 700K-1.2M adds. Some analyst estimates pegged the quarterly net adds higher, but the upward momentum is more than enough to satisfy investors.
- Total U.S. subscribers at the end of the quarter was 31.09M vs. 30M expected and 28.7M for rival HBO.
- The company says it expects to double its investment in original content, although still keeping the spend below 10% of total content expenses.
- Q4 guidance is for net additions of 2.01M which is above the estimates of some analysts.(shareholder letter .pdf)
- NFLX +9.5% AH.
Oct. 21, 2013, 4:01 PM
Oct. 21, 2013, 7:04 AM
- Netflix (NFLX) is expected to announce it has reached 31M paying U.S. customers when it reports Q3 earnings after the bell, a level which would put it well past HBO's monthly subscriber count.
- Some rosier projections see the company adding another 4M paying customers in Q4 to eclipse the 35M mark.
- On the global front, Netflix could pass 50M subscribers sometime in the first part of 2014.
Oct. 21, 2013, 12:10 AM
Oct. 20, 2013, 8:56 PM
- It's no surprise fixed income is a hated asset class, but how much so? Just 4% of respondent's in Barron's Big Money poll of money managers are bullish on the sector, with 85% bearish. By contrast, 79% have a positive view of equities vs. 7% negative.
- Not surprising given negative feelings about the bond market, the utility sector garners the most votes (32%) for being the worst expected performer over the next year. Taking first place for the sector expected to perform best is - what else - tech.
- WIth 91% of managers in agreement, Sears (SHLD) tops the list of most-hated stocks. Next at 87% is Tesla (TSLA). After that with 80% Is Herbalife (HLF), followed closely by ZIllow (Z) and Netflix (NFLX).
- Apple (AAPL) and Berkshire Hathaway (BRK.A, BRK.B) top the list of most-loved stocks with 70%, followed by Citibank (C) at 60%.
- Broad fixed-income ETFs: AGG, BND, LAG, SCHZ, BOND, SAGG, MINC.
- Broad equity exposure ETFs: IYY, VTI, EXT, TOTS, EUSA, ITOT.
- Utility ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
Oct. 20, 2013, 5:35 PM
Oct. 17, 2013, 3:02 PM
- The NFL denies a report that it's considering adding a second game to Thursday nights with its own cable network failing to land impressive ratings.
- Some of the options which inside sources reported were being considered included tech giants such as Netflix (NFLX +1.6%) and Google.
- Though an interesting idea, and one that could justify a hike of the monthly prices it charges to customers, Netflix isn't ready on the back-end just yet to live stream sports.
NFLX vs. ETF Alternatives
Netflix Inc operates as an Internet television network providing TV shows & movies which include original series, documentaries & feature films. The Company has three segments namely Domestic streaming, International streaming & Domestic DVD.
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