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October 25, 2011 – Comments (4) | RELATED TICKERS: NFLX

Oh Netflix, what dost I think of thou?  Apparently my Netflix call in late September was premature.  Took a bath on that one, but now I am back in fo some mo'!  I don't know what to think about Netflix management over the past six months but I think they have gotten the message loud and clear and that they are going to enter the next year more humble and eager to please customers.  The reason that I put more money into the stock this morning is that Netflix is still way ahead of its competitors in terms of user experience and content offerings, they have over 20 million customers, and a refurbishable brand.  Granted they have lost loads of customers recently and they are predicting a few quarters of unprofitability, but I believe that they can turn things around and in the long term they will be a major player.  The international expansion opportunity looks very promising although expanding beyond UK & Ireland is now on hold until they can get it together.

 

This is definitely a high risk pick but it may return handsomely in the long term.  There is also the off-chance that they will get bought out by Microsoft, Google or Amazon which I think would be a great move by any of these big players with lagging video offerings. (and yes, I think Amazon's offering is unimpressive at the moment).

 

Disclosure: very long NFLX 

4 Comments – Post Your Own

#1) On October 25, 2011 at 2:31 PM, chk999 (99.97) wrote:

What worries me here is this is former fast grower trying to change business model. Historically that trick doesn't work very often and you end up with companies like United Cigar that used to be huge and then fashion changed and they went out of business.

Netflix may or may not manage the transition from DVD delivery to streaming, but it will be a perilous journey. 

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#2) On October 25, 2011 at 5:05 PM, MFAbbott (< 20) wrote:

In looking at the 2 year chart for Netflix, one wonders about all the expertise and hundreds of stock analysts who scrutinized every detail of this billion dollar company.

Now, all of a sudden, it's all evaporated.  Makes one wonder about the entire industry of Wall Street, where paper pushers get paid for basically blowing hot air.  

Of course when the weather man gets the forecast 100% wrong, no one ever cuts his salary. 

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#3) On October 25, 2011 at 7:10 PM, CCharing (89.36) wrote:

With so many more well funded heavy weights looking like they want to compete in this space I think Netflix is toast...

Google, Apple, Amazon - take your pick

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#4) On October 25, 2011 at 7:26 PM, TruffelPig (< 20) wrote:

If you buy NFLX, yes, you are correct - you will be in it for a long, long, long time. "Until death parts us".

 

(I sold my shares at $130) 

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