Nice earnings surprise, wacko stock.
Nflx
- Thread starter EliteTraderNYC
- Start date
I hadn't seen it until last night but the short interest got really high.
Icahn having a party. He doubled his money in like 3 months and it wasn't a small postion - like $500MM.
Icahn having a party. He doubled his money in like 3 months and it wasn't a small postion - like $500MM.
Loving NFLX here, got in at the 125 strike at .20$ before earnings. Sold too early when it hit 24$ the next day. It's at 42$ today, could you imagine 
This stock is flying on nothing. From Seekingalpha:
"Falling profits and rising costs
Yes, the stock didn't post a loss as analysts were expecting, but nevertheless earnings actually fell 92% from a year earlier. Additionally, the growth in revenues, which used to be 32% comparing Q4 2011 and Q4 2010, slowed to a mere 7% this last quarter.
The stock is actually flying pre-market, though: it must be the subscribers growth then, clearly subs additions must have accelerated suddenly. Well, turns out, subs growth actually slowed compared to one year ago, from 24% to 20%.
Put it in perspective: at the end of 2006 subs were 6.3 million and net income stood at $14.9 million. Six years later, subs have more than quintupled to 33 million, while net income didn't even manage to double.
One of the main causes? The gargantuan deals Netflix is sealing with content providers, which allow the company to let its user stream more content (and therefore attract more of them), but at the same time have a massive impact on the income statement. Just look at the last major deals Netflix manage to sign:
Dreamworks deal, late 2011
Disney deal, late 2012
Time Warner deal, beginning of 2013
Each of these deals is estimated in the hundreds of million dollars, the burden of which might get compensated by subs fees, but which clearly offers no certainty of growth in earnings by itself."
"Falling profits and rising costs
Yes, the stock didn't post a loss as analysts were expecting, but nevertheless earnings actually fell 92% from a year earlier. Additionally, the growth in revenues, which used to be 32% comparing Q4 2011 and Q4 2010, slowed to a mere 7% this last quarter.
The stock is actually flying pre-market, though: it must be the subscribers growth then, clearly subs additions must have accelerated suddenly. Well, turns out, subs growth actually slowed compared to one year ago, from 24% to 20%.
Put it in perspective: at the end of 2006 subs were 6.3 million and net income stood at $14.9 million. Six years later, subs have more than quintupled to 33 million, while net income didn't even manage to double.
One of the main causes? The gargantuan deals Netflix is sealing with content providers, which allow the company to let its user stream more content (and therefore attract more of them), but at the same time have a massive impact on the income statement. Just look at the last major deals Netflix manage to sign:
Dreamworks deal, late 2011
Disney deal, late 2012
Time Warner deal, beginning of 2013
Each of these deals is estimated in the hundreds of million dollars, the burden of which might get compensated by subs fees, but which clearly offers no certainty of growth in earnings by itself."