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biobat

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  • Apple: Is It Time To Take Profits? [View article]
    You're empirical model says $875 at current valuations yet 3% higher than that is absurd? Am I missing something.
    Jun 1 04:48 PM | 17 Likes Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    Of course the cost of content is recurring but it's turning out that it's a somewhat fixed recurring cost. Many thought that after the initial Starz deal that content cost would grow as fast or faster than subscribers and revenue if they wished to retain the same content OR that they could have fixed content costs (they've kind of gone with this model), while losing some of the content they used to have. Most people thought that the rising cost, or the loss of content would cause them to stumble and lose subscribers. It turns out that everyone was wrong and Netflix has seen sustained and at times accelerated subscriber growth which has led to massive streaming margin expansion in the US, Canada, and now Europe.

    The increase in subscription cost and the way it was rolled out this time was brilliant. New subscribers will incrementally go straight to the bottom line and they're likely to retain old subscribers at a greater rate simply to keep their cheap price locked in for 2 years.

    From a valuation standpoint, I can see why one would want to short it but you're going against the crowd on a momentum stock. There may be a time to short it but I don't think it's that close yet. This isn't 2010 with an ill fated email and 60% increase in price for all.
    Jun 1 12:51 PM | Likes Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    I used to think it would be difficult but Netflix has great margins on domestic (and Canadian) streaming. They're international margins are improving rapidly. They've shown they can do it and do it successfully and improve those margins when everyone said they couldn't. I have no doubt they'll do it again.
    Jun 1 07:03 AM | 1 Like Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    Because it is like Amazon and other growth/disruptive companies. The slow and steady backward looking metrics never work because the models never account for unknowns.

    Example, last February, Netflix was trading in the $170-185 range but their PE was 600+. Today that stock's more than doubled yet the PE has dropped to 150 and forward looking it's in the 40-60 range (based on 2014 projections and today's current price). So was Netflix really 5x overpriced in early 2013 relative to today? No, the earnings models applied for 2013 metrics were looking at 2012, a year when Netflix turned itself around from losses due to international expansion to slowly building up earnings again so their profits weren't there.
    Jun 1 07:02 AM | Likes Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    Netflix has shown the ability to grow earnings pretty rapidly when they have to and has shown that they'll sacrifice short term earnings for long term market gains. The first round of streaming is wildly successful and profitable now, the first round of international expansion (Canada) has been profitable for over a year, and the second round is just about at break even and will be profitable by the end of the year. New expansion this year will hurt the short term earnings and be a drag for 12 months or so but after that, earnings will ramp up fast and furious just like they have in every sector they've expanded into. They're not nearly as overpriced as people make them out to be.
    May 31 02:40 PM | 2 Likes Like |Link to Comment
  • BlackBerry: First 50-50, Now 80-20, Soon 100-0? [View article]
    Android, cheap and half decent do not work at the same time. While there are great Android phones, they aren't cheap. There are also cheap Android phones, but they're not good or even half decent. They're complete garbage.

    We'll have to see if the Z3 can marry the good and cheap into a single phone.
    May 31 12:18 PM | 1 Like Like |Link to Comment
  • AT&T's DirectTV Acquisition: The Cons Outweigh The Pros [View article]
    No, it's not.

    Middle class income is not one simple income point - it's a range and $68K is solidly within the middle class income range.

    Even looking at household incomes above $75K ($75K btw is still in the average middle income class range), makes up a minority of their subscriber base. No doubt there are some very affluent subscribers as will be the case for all pay TV services but they do not dominate DTVs subscriber base.
    May 31 08:02 AM | Likes Like |Link to Comment
  • BlackBerry: First 50-50, Now 80-20, Soon 100-0? [View article]
    shaned,

    Correction: Chen didn't say one year, he said BBRY had an 80% chance of survival, which implies a much longer time frame.

    As for the 564 comment - I understand it's a joke but really, who cares? The biggest point of investing is to make money. It doesn't matter where you make the money from or where you company ranks.
    May 31 07:37 AM | 2 Likes Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    The notion that anyone could repeat Netflix streaming and make it a success has been repeated so many times over the past 5 years and you know what - it's simply not going to happen with the current subscription streaming model. Netflix has beaten off all comers and continues to grow stronger by the day.

    Netflix is more than simply content delivery - they're usability, they're rapid buffering so streaming is (nearly) instant, they're an aggregation of user reviews and profiles - profiles that many aren't easily willing to give up on. It provides them with a walled garden that keeps users on the Netflix platform, not unlike iTunes was for years.

    I also have my doubts that Apple will be moving into gaming that takes on PS4 or XboxOne anytime soon. They've missed the window on this generation of machines.
    May 31 07:26 AM | 1 Like Like |Link to Comment
  • Apple: Why Netflix Could Follow Beats [View article]
    "Rights to content in both cases (Hulu and Netflix) would not survive transfer of ownership, which makes both scenarios an impossibility for Apple."

    I would very much doubt that but there is simply no way to validate it one way or the other unless you've looked at Netflix licensing agreements.
    May 30 10:16 AM | Likes Like |Link to Comment
  • BlackBerry: First 50-50, Now 80-20, Soon 100-0? [View article]
    Dino, Blackberry is becoming an enterprise company again. Long term, it matters little what the consuming public thinks or perceives.
    May 30 09:49 AM | 7 Likes Like |Link to Comment
  • BlackBerry: First 50-50, Now 80-20, Soon 100-0? [View article]
    To be fair, Blackberry had more than a little negative news - they saw themselves become a bit player at best in a market they dominated a few short years ago, had constant release delays, launched products nobody bought, and went from debt free with lots of cash to indebted with a lot less cash (and personnel).

    The negative sentiment was more than warranted. But at some point negative sentiment became disconnected from reality to the point of people expecting them to go out of business tomorrow. With even the most pessimistic model, they had enough assets, cash, and ability to raise capital that it wasn't going to happen for at least a couple of years. That gave them time to put the proper management team in place and start to get the company back to profitability. They're not there yet but I have no doubt that John Chen will do it and this will go down as one of the big corporate turnarounds (think IBM, GE, F, SIRI, HP) and cement his legacy as an all star CEO.
    May 30 07:22 AM | 21 Likes Like |Link to Comment
  • Why You Should Buy DirecTV [View article]
    Who is this 'most' you speak of? And what defines major?

    Look, T is trading at a fairly low valuation (PE: 10, forward PE: 13) relative to the overall market. The likelihood that it'll face a steep correction like a market high flier would is pretty minimal because what tends to happen during corrections is people move into defensive stocks - ie. stable dividend payers. That just happens to be T. I doubt we'll see T trade much below $35 but if they do through some sheer stroke of luck drop to $30, I'm buying.
    May 27 01:30 PM | 1 Like Like |Link to Comment
  • AT&T's DirectTV Acquisition: The Cons Outweigh The Pros [View article]
    You just proved my point.

    My city was the first in our state to have U-verse 7 years ago and it hasn't really expanded beyond the initial area. You can call it a slow roll out if you want but there has been almost no expansions since 2007. Logic would call it otherwise.

    T is simply going into cities where they can get the low hanging fruit and check off another city and state on their list for marketing purposes. They won't be able to do this in the Northeast and Southeast as Verizon has most of the region locked up so there won't be much expansion beyond what's already there without a huge cash influx.

    And a $68K median income for DTV subscribers is hardly 'upscale', that's solidly in middle class territory.
    May 24 05:41 AM | Likes Like |Link to Comment
  • AT&T's DirectTV Acquisition: The Cons Outweigh The Pros [View article]
    No disrespect but you can't say you're opinion is that it's not limited because it's a fact that it is. It's only available in 22 states 8 years after launch. And even within states where U-verse is available, there are many towns where you can't get it. Even within towns that have it, it's typically only available to a fraction of the population. This is in fact, more often the case than not with U-verse. So while it's true their in 100 cities, they are very far from being available to every resident in those 100 cities. 7 years ago, U-verse officially launched in my town. Today it's still only available to a quarter of the residents, many of who complain about shoddy service and slow speeds. So in 7 years, T hasn't been able to iron out the kinds or make it universally available in a location (hey, it's cost constraints) which makes it a limited market players. This is in contrast to their DSL offerings which are universal available here, like DirecTV or DISH or even Comcast (locally).

    U-verse is a small potatoes, fragmented, limited market bit player in the pay TV industry. DirecTV is not. There will be some overlap but it's going to be insignificant. T will not be competing with itself.
    May 23 02:16 PM | Likes Like |Link to Comment
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