Is it truly a ponzie scheme, or is it just a bad business model (i.e. original investors being paid off by VC's, VC's being paid off by IPO, etc.) Would the SEC still clamp down on a flawed, inherent ponzie model if they could prove the founders knew it was bad?
I was wrong on this stock. It's because if they don't increase their subscribers by 25% next year they will have to raise capital to pay their licensing fees. If they raise their customers by 34% then they will be able to make the same operating income they made in 2011. So they have to increase their user base while being assaulted by better capitalized competitors. This doesn't bode well for current shareholders as they are likely to get diluted in a secondary.
nflx was a great growth story. jan 2010 it was at 50 bucks . 300 bucks recently. who can ask for me. it had a good run. the stocks best days may be behind them the stock in the 100 range still a good momentum stock to trade
netflix is now going into gaming which is just as big for rentals. They have a good model so becareful of the short squeeze. Its the holidays in 8 weeks and those netflix gift certificates may be a winner short term. I think that streaming rentals are here to stay.
But a gaming disc probably costs them 2-3 times as much as a movie disc (based on retail prices), and they are more sensitive to scratches. I personally can't wait to try out the gaming discs, but that doesn't mean it is a good or profitable business model... With movies they are switching to streaming, unless they can stream games too, they are just encouraging disc usage... (what is less profitable)
Gaming is also probably a relatively small percentage of their marketable userbase. International expansion is where they really need to succeed.
Hi.., I will not try to predict the future of NFLX. All I know is that the volatility was very high yesterday, and I expected it to fall, so I put some Iron Condors.
The sale of Blockbuster to Dish despite my advice will create dish as a future leader in the space for everything digital. The blockbuster footprint allows them to get more content out to their clients with their program. Its slow and also this allows dish to stream movies on their networks on demand versus paying the broadcast fees. With Satellite delivering Internet in the future as a real threat you will see Netflix lose ground not to mention several startups are coming up with their own content and also Google is cannibalizing everything. they went into music last week officially. Short term they will get subscriber growth but long term its dead in the water great for a trade but I wouldn't hold it over the weekend.
"The sale of Blockbuster to Dish despite my advice" did they ask you for your advice? are you always this presumptuous or only on saturdays?
The main reason for a possible NFLX bankruptcy is the high (and growing) Accounts Payable and the high (and growing) off balance sheet liabilities. These are discussed in great detail in various Seeking Alpha articles: www.seekingalpha.com/symbol/nflx