Netflix Stock
Is it time to cut my losses and sell, or does anyone think it could rebound?
Sell and buy Disney instead
it will rebound
Netflix is profitable on paper only. The reason that they have positive net income is because of how they value their 'streaming content assets'. Operating cash flow was -2.7B in 2018. It's an unsustainable business.
Look up their cashflow statement to learn more. Don't be fooled by accounting tricks.
The business has been unsustainable for years, but nobody cares. It's the story around NFLX that matters, and Disney is killing that narrative currently. NFLX is dead money until it's proven the two services and co-exist.
Short
Buy more around if it gets around $200/share. It's not going higher in the short-term with Disney Plus on the horizon - the Netflix narrative has been damaged. Still a great company.
Thanks everyone- tough call right now but I guess I’ll wait a few weeks to see if I can at least recover some losses if people start buying it this low.
It will rebound for the most part, but I think this is the first sign that they started a revolution that will eventually lead them behind.
Sounds right
At what price did you buy?
Bought at $361
oh my, how much did you buy because that’s quite high
There have always been problems with debt, and I think it will rebound. Film studios have always been able to accrue more debt in their balance sheets than tech, and amortize it over decades. And compared to other studios, their library is still quite small. I think they might drop to $270 or so. But the sell-off will end sometime this week. Media oversells the winner-take-all dynamic of the market. Netflix will survive Disney, Amazon, and HBO Max for sure. Investors have been trained by Netflix to tie validation to growth. There’s a lot of long-term value left in international growth that US investors fail to recognize right now. It’s hard to imagine Netflix completely tanking with $30b invested in original content and over 120m subscribers. They always seemed to have a really good grasp of the market dynamics driving their business. I’m hoping this bit of public embarrassment is enough of a catalyst to push the company to make some tough choices. They’re still losing something like $4/mo per sub and seem to be blaming their problems on prior price hikes & pegging their future to markets like India that don’t raise Avg revenue per subscriber. Obviously they know their numbers best but this doesn’t seem like an obvious solution to their problems now. They need to focus even more on content that travels internationally and find mechanisms to monetize content outside of their ecosystem, like other studios are doing, and stop wasting money on vanity deals / exclusivity deals. Stop throwing cheap money at problems and become profitable in markets where they no longer see potential for growth (like Uber in the US).
I think it will rebound
Give the reasoning behind your opinion
Every company will go through up and downs. One quarter with less subscribers than previous quarter won’t change the company value. I think should Always think in a long run.