Hey Guys, I have a final round interview at a hedge fund coming up and they asked me to make a presentation on NFLX and make a long/short recommendation on the stock and bonds. I am much more familiar with valuing equities than bonds. The NFLX bonds are rated BB and mature in 2017 with YTM around 8% and a coupon of 8.5%. NFLX doesn't have a large amount of tangible assets so for the bonds to be redeemed in 2017 the company must still be in existence for bond holders to get their investment back. Now the company is doing very well but there is still some uncertainty given that the industry is moving towards a pure online streaming model and other competitors will likely try to enter this market (there are already competitors but larger competitors that are very tech savvy with deep pockets could enter). My question is, do most hedge fund high yield bond groups look for an investment like this? I thought most were more interested in distressed debt or in debt where they know the company has assets with real value that will ensure they get their investment back. The yield is fairly attractive assuming the company survives, but the company is just a middle man without a significant amount of tangible assets. Would it be ludicrous for me to make a recommendation saying to neither buy nor sell the bonds? Also, I'm going to do a quick DCF model (haven't done it yet) just to see how many subscribers and how much rev per subscriber they would need to justify their current valuation (I will do some sensitivity analysis as well). My guess is that my analysis will shows that the stock is grossly overvalued. However, I usually shy away from shorting stocks with good fundamentals. Do you think they are looking for someone to actually make a long/short call as opposed to saying to just avoid it? Are most hedge funds willing to short NFLX? In prior interviews they have said they are a shop that doesn't worry about daily p/l and can take a longer term approach and some heat on some of their positions. If my analysis shows the stock is overvalued do you think it makes sense for me to give a short recommendation? Just wondering if they are looking for guys to actually make calls as opposed to guys who always find the negatives and risks and don't make many calls.