$118.30
-5.63 (-4.54%)
Netflix, Inc. (NASDAQ:NFLX)
CAPS Rating:
Netflix delivers its comprehensive library of movies and TV shows online and through the mail in their ubiquitous red envelopes.
Netflix delivers its comprehensive library of movies and TV shows online and through the mail in their ubiquitous red envelopes.
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NetFlix is a classic "cool idea, terrible long term investment" stock. When digital distribution emerges for rentals on broad scale, Net Flix has no reason for being. Period.
If I'm going to pay 22x earnings for stock, I would prefer a business model that has at least a theoretical chance of long-term survival - and not have Apple, Google, Amazon, Yahoo!, Microsoft, the Cable companies, the telcos, and every other powerful player jammed in the middle of digital distribution breathing down their necks threatening disintermediation.
The only way I see a NetFlix investment paying off, long-term, is if one of the big guys erroneously overpays for their customer base. That makes it more of a speculative play than an investment.