Netflix is house of cards....

Discussion in 'Stocks' started by jfmiii, Oct 22, 2010.

  1. jfmiii


  2. Notice the boom and bust, back to boom and so on are oscillating more frequently and with greater amplitude. Basically, we've gone thru the past 10-15 years of intensifying asset bubbles in some sort of desperate attempt to mask the failings of the real economy with a type of diversion.

    How does this relate to NFLX? Well, the mention of AOL just set in motion the deja vu of the late 90's when everybody was chasing that stock higher based on a faulty premise. I will say that at the very least 11 years ago it was human gullibility or maneuvering that was driving that bubble. This time around it's something altogether more devious. More of "the end justifies the means" type of orchestrated bubble re-flation.
  3. I think you've misinterpreted the information presented, although you've definitely picked up on Zerohedge's aptitude to mislead.

    There are 3 key points in those articles: 1) Large increase in free subs 'distorts' numbers if they cannot be converted 2) They need to raise $100-200MM to fund necessary expansion (according to ZH) 3) ZH thinks a follow on offering is likely

    Point 1 is relatively mundane and provides perspective on the numbers - reserve judgment for when you can identify if they've been converted to subscribers. Point 2 seems like it could be an issue to find cost effective funding - however if this is true then point 3 becomes the solution.

    This is a far cry from a 'house of cards' and is no more a distortion of its numbers than the vast majority of companies. ZH seems to imply a short position - which could be risky, even given a follow on offering as shares can rebound to previous levels even given the additional shares. If anything, this is interesting information and gets put into the 'don't buy netflix' bin. Anything beyond that is assuming too much imo.
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