CNBC Guest alleges: NFLX Cooking the Books

Discussion in 'Stocks' started by Rearden Metal, Feb 11, 2011.

  1. My gut feel is that this guy is going to be proven correct before the year is up:
    NFLX Netflix sinking on volume as CNBC guest discusses short idea on NFLX; says co is overstating cash flow and income (225.57 +2.48) -Update-

    Brecken Capital founder, on CNBC, discusses why he is short shares of NFLX. Says accounting issues from Q2 to Q3 to Q4 have gotten worse. Co is overstating cash flow net income, according to him. Accounts payable rose well over 100% to completely wipe out cash flow. Co isn't generating any cash flow from their business if you adjust the accounts payable change and adjust to the fact that they are under amortizing on the net income side their content costs. Believes they are playing accounting games, it will catch up with them, and stock will move to well under $70.
  2. Thanks for posting.
  3. S2007S


    Was watching that myself as nflx of course was touching historical highs, this stock will eventually collapse, dont think for a second this stock is going to continue and post 100% rallies year over year, when this game ends this stock will be sitting well below $100 a share, every stock has its day and nflx is having theirs right now, reminds me of the dot com days all over again. This stock could easily lose 50% in a month or two when the trend ends.
  4. The premise of netflix is good but bandwidth is expensive. They're trying to squeeze their providers on cost and oversell their transit like some kid running a hosting company from his mom's basement.
  5. BwPirt


    I'm still long for the moment. I'll stay long unless something more concrete comes out about them cooking the books. Otherwise I'll look for another double.
  6. S2007S


    Another double, so you think nflx could go to $500 a share, competition is going to come in strong over the next 12-24 months, nflx will lose a lot to competition. Aside from that if news were to come out that they were "cooking the books" by the time you get to sell your shares the stock would be down over 50%, its not like your going to get the opportunity to sell your shares ahead of everyone else when or if this news is real. The stock would be halted by the time you get to sell your shares.
  7. what would a dec 2011 100-75 put spread cost to go long?
  8. Larson

    Larson Guest

    This outfit is running some massive throughput. Volume covers a lot of sins, until the competitive landscape changes and flaws are exposed. For the moment, all is golden.
  9. 1.20 or so. The 130/150 put spread is 4.00. Both Jan12.

    Better still; the 100/200/300 Jan12 fly is $36.
  10. I personally know some people associated with accounting at Netflix. I highly doubt they would sit by idly and let shenanigans go on, especially if it would damage their reputations. They would either whistleblow or quit outright.
    #10     Feb 11, 2011