A truly phenomenal stock that is receiving a lot of speculation, Netflix currently produces very little cash flow but has a market cap of close to $20bn. From the company's perspective, it makes sense to use such a high valuation to raise new capital and put it to work or to at least buy some treasuries. From a conservative investor's perspective, this valuation does not make much sense. However, this is what makes the market such an interesting place. Overshooting and undershooting is more the rule rather than the exception. To us, Netflix appears to be an extreme example of overoptimism.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.