Netflix, Inc. (NASDAQ:NFLX)

I love days like today!

From the breath taking highs in the low $300's, I watched jealously as the share price continued to climb.
From the initial mishandling of the price increase and the immediate fallout causing around a 30% hit in stock price, I watched anxiously as the stock fell back to earth.
From the higher than expected associated subscriber loss and an additional 35% drop in stock price today, I'm no longer watching. I'm jumping in greedily.

It wasn't too long ago that I read several articles mentioning that customers streaming Netflix were responsible for approximately 20% peak downstream bandwidth usage. The loss of 800k subscribers is not insignificant. A 70% drop in share price in just a few months is not insignificant either. The cost of expansion into Europe and the subscriber loss in the U.S. coupled with increased licensing expenses undoubtably create a period of uncertainty for Netflix. In the end though, I believe that Netflix will continue to innovate and lead the way. I may be wrong and they may get swallowed up by Apple or Amazon, but at the current valuation, it's a risk I believe is worth taking.

Content providers will have to meet Netflix, et al, somewhere in the middle on price. If the content providers demand too high of licensing fees than Netflix can afford to pay, then everyone loses. I would hope they realize that. I kind of look at this fiasco in a positive light though. It serves notice to the content providers that their future meal ticket is tied directly to companies like Netflix and they must negotiate reasonable fees instead of exorbitant fees if they want to thrive.

Even though customers are price sensitive, on demand streaming is not going away. People want something for nothing and all too frequently focus on the small costs in their lives rather than the big ones that make a huge difference. This is the same mentality that causes people to spend 20 minutes driving 15 miles out of their way to save 3 cents on a gallon of gas (and only fill up an 11 gallon tank!). I cut the cable a couple of years ago and am quite happy with a combination of Netflix, Hulu, Amazon Prime streaming coupled with the occasional rental (streaming) from iTunes or Amazon. I spend much less money and watch what I want, when I want. Cable is dying a slow death. Netflix will fix its problems and regain profitability. Viva la Netflix!

I think the worst is over and expect to see this back over 100 by the end of the year....

their in a service field as more players enter and technology changes they have no edge the price of the stock at $300 was a great deal for those who sold. Just think AOL and if you have a profit sell and watch it drop

oversold on short term news

It may be difficult for NetFlix to recoup customer angst over their stupid price increase for subscription service. Institutional investors may think otherwise, which may be NetFlix's only saving grace.

For anyone familiar with Options, this is a great time to think about a Long Strangle. I am long Mar 80 call and long Mar 70 put. I believe this stock is either going to rebound nicely to the 150s or bottom out in the teens.....but have no idea which one :). I am certain that the price will move, and move big in the next 4 months so want to hedge and bet on momentum.

should go private.

leveraged buyout by redbox would be my preference.

Calling the bottom

I believe it finally hit bottom. Time to buy.

The stock has taken three large drops in the last few months.

1. The first came when it announced the price increases and it fell over the course of a few weeks.
2. The next came when the report detailing exactly how many user left and the priced drop 30% in a day.
3. Lastly, the earning report detailing this past quarter comes out and investors fly away in droves causing the prices to drop another 30% in one day

Strikingly, all of this is just different views of the same elephant: a simple price increase. It hard for me to imagine that a company has loss over 70% of it's value because of a price increase. Management is the same. Product is the same. Market is the same. Plus the p/e for nflx is now reasonable. And unless users continue fleeing (which i strongly doubt) nflx is the bargain it was 2 years ago. Plus now the users that stayed will be paying higher rates so revenue should increase in the next quarter. It may take a few months but this train's turning around and will never be as overvalued as it was this summer, but long story short: buy.(period)

Dead cat bounce.

I remember the first time Chrysler has problems back in the '70s. everyone thought they were doomed. Their share prices crashed, everybody fled.

But they survived, because like people said, "They're an icon of the American way, we can't let them die."

Kind of the same thing with NetFlix. There's way too many users of NetFlix that use their service as a way of life,

With no real replacement (at least not one that people are profoundly comfortable with like NetFlix), I see NetFlix weathering the storm of bad decisions and turning things around withing the next 12 months.

Lesson Learnt: You can loose 75% of your money if the timing is wrong!

I dont see it falling much more than it already has. 70%+ is quite a beating and this is a purely momentum call

too a good dip today, but I don't see any competition with a better strategy...

The market has overreacted to a 5% loss in customers. Netflix still has the optimal online streaming business and has a strong future ahead of it (even if not as the market leader.)

It just dropped almost 40% on a loss of only 4% of its subcribers. IRRATIONAL?

Market overreaction last night

While I think Reed Hastings is an absolutely horrible leader, I think Netflix is oversold given their strong Internet business. Unless he pulls the rug out from everyone yet again by blindsiding us with some other ill-prepared blog, I think this will stabilize and grow again.

While margins aren't what they used to be on both sides of their business, you can't overlook the massive amounts of subscribers that haven't left.