The Bankruptcy of NFLX (Netflix)
- Thread starter chaosclarity
- Start date
We can assume the price of those rights are going to get higher when the licensing will include Europe and/or Asia.
So I don't see including Europe as an answer to their prayers. Also if they can't protect privacy people will just torrent the movies instead of subscribing to Netflix...
Right now Amazon streaming is a better deal, although it has less titles in their library. Only $79 annually and you get free shipping on any products. So if you order once a month from Amazon, you basicly get the streaming for free. Students get it at half of that price. Once Amazon builds up their library, it will be a nobrainer whom to choose....
I just can't see the Netflix model being viable at such a low price. Maybe without competition, so eventually they could rise the price, but so far the opposite happened, and from the orifginal $20 they went down to $8. There is no way they are making money at $8 per month...
Lets run the numbers-
To stream a 1 hour movie costs .05 cents in bandwidth costs
With no one user streaming 24 hours a day. The rights probably have a price and at some point the break even.
What are the costs after the breakeven- The DVD costs are in the subscription. It can be heavily automated and if they add an advertisement in the DVDs there is free revenue there as well as streaming. No lets look at a possible mobile unit explosion which is a real possibility and then you see a winner.
Blockbuster had 4 billion in revenue in 2009. Its a billion dollar industry and the Studios don't provide rights to just anyone.
If you are under 16 Netflix is the equivalent to the cable package.
Selling $200 million of convertible bonds with a conversion price of
$85.80 per share. Zero coupon on the bonds.
http://www.sec.gov/Archives/edgar/data/1065280/000119312511318584/d259954d8k.htm
http://www.zerohedge.com/news/anti-...er-company-announces-equity-raise-sheeps-clot
Although I am bearish on NFLX, I fail to see how this is an "equity raise in sheep's clothing" given that conversion to equity only appears to be mandatory if the company gets into trouble.
My reading of the 8-K is that if the company does OK between now and maturity (2018), then the principal gets repaid and the notes are retired.
$85.80 per share. Zero coupon on the bonds.
http://www.sec.gov/Archives/edgar/data/1065280/000119312511318584/d259954d8k.htm
http://www.zerohedge.com/news/anti-...er-company-announces-equity-raise-sheeps-clot
Although I am bearish on NFLX, I fail to see how this is an "equity raise in sheep's clothing" given that conversion to equity only appears to be mandatory if the company gets into trouble.
My reading of the 8-K is that if the company does OK between now and maturity (2018), then the principal gets repaid and the notes are retired.
Offering size is now $400 million total, comprised of $200 million common stock and $200 million convertible bonds.
http://ir.netflix.com/releasedetail.cfm?ReleaseID=625783
"Netflix Announces Pricing of $400 Million Concurrent Common Stock and Convertible Notes Financing"
Netflix has agreed to sell approximately 2.86 million shares of common stock pursuant to an effective registration statement at a public offering price of $70.00 per share, for a total of $200 million gross proceeds.
Concurrently, TCV has agreed to purchase $200 million aggregate principal amount of Zero Coupon Convertible Senior Notes due 2018 (the "Notes") in a private placement. The Notes will be convertible into shares of Netflix common stock at an initial conversion rate of 11.6553 shares of common stock per $1,000 principal amount of the notes, which is equivalent to an initial conversion price of approximately $85.80 per share of common stock, subject to adjustment upon the occurrence of certain events.
The Notes will mature on December 1, 2018 , unless previously repurchased or converted in accordance with their terms.
http://ir.netflix.com/releasedetail.cfm?ReleaseID=625783
"Netflix Announces Pricing of $400 Million Concurrent Common Stock and Convertible Notes Financing"
Netflix has agreed to sell approximately 2.86 million shares of common stock pursuant to an effective registration statement at a public offering price of $70.00 per share, for a total of $200 million gross proceeds.
Concurrently, TCV has agreed to purchase $200 million aggregate principal amount of Zero Coupon Convertible Senior Notes due 2018 (the "Notes") in a private placement. The Notes will be convertible into shares of Netflix common stock at an initial conversion rate of 11.6553 shares of common stock per $1,000 principal amount of the notes, which is equivalent to an initial conversion price of approximately $85.80 per share of common stock, subject to adjustment upon the occurrence of certain events.
The Notes will mature on December 1, 2018 , unless previously repurchased or converted in accordance with their terms.
In addition to the capital raising, they are warning of a loss for all of 2012:
http://www.businessinsider.com/netflix-lose-money-2012-2011-11
http://www.businessinsider.com/netflix-lose-money-2012-2011-11
I saw your GRPN prediction, so you have no credibility in business talk.
Revenue itself is irrelevant without knowing costs and thus profits.
But probably because of that huge revenue they closed down hundreds of Blockbuster stores, right?
Let's just for the record quote the closing price today: $70.45 (new low)
Revenue itself is irrelevant without knowing costs and thus profits.
But probably because of that huge revenue they closed down hundreds of Blockbuster stores, right?
Let's just for the record quote the closing price today: $70.45 (new low)
Quote from Pekelo:
I saw your GRPN prediction, so you have no credibility in business talk.
Revenue itself is irrelevant without knowing costs and thus profits.
But probably because of that huge revenue they closed down hundreds of Blockbuster stores, right?
Let's just for the record quote the closing price today: $70.45 (new low)
Lets put in a wager here. YOU are right will be the prize and I was wrong is the name of the post. 1 year from today.
I hope you are ready for this ride. Tell your wife you won't be home that you are going out with the buys. Not BOYS- Buys.
Grpn is still in the quiet period and the market is down.
Research my posts and you will see that Im usually profitable. Except for that BP which haunts me to this day I take my medicine when I have to.
Lets go . $70.45 November 23,2011.
Are we talking about NFLX or GRPN? Netflix, they eventually have to account correctly for those movie rights and that is going to hurt their bottomline.
GRPN, if you read my thread (Groupon is a straight-up Ponzi scheme) you realize what the other guy said in the GRPN thread, they are paying the vendors with the new money coming in. Once the growth stops, they can't pay the vendors, the system collapses.
But sure, the bet is on. NFLX will be way less a year from now, let's say not higher than $50.
GRPN will be under $10.
P.S.: What do you think of Pandora? Another tech stock, with a recent IPO. Stock was as low as $10 but it did have nice rallies. In 5 years it will be bankrupt or sold...
GRPN, if you read my thread (Groupon is a straight-up Ponzi scheme) you realize what the other guy said in the GRPN thread, they are paying the vendors with the new money coming in. Once the growth stops, they can't pay the vendors, the system collapses.
But sure, the bet is on. NFLX will be way less a year from now, let's say not higher than $50.
GRPN will be under $10.
P.S.: What do you think of Pandora? Another tech stock, with a recent IPO. Stock was as low as $10 but it did have nice rallies. In 5 years it will be bankrupt or sold...
I am talking about NFLX. The rest of your stock shorts I can honestly say you may be right there. I just think that Grpn is a poster child and thus will be supported for a while. I spoke to a VC friend who also said It was a liquidation to release funds that were locked in the original Series A deal.
Just got the NYC Helicopter Tour deal coupon yesterday & saving me over 100.00 . I was amazed since I was looking for that. I think they have a cookie on my computer that is tracking me.
But here is the news for NFLX
http://www.streamingmedia.com/Artic...ticles/One-Format-to-Rule-Them-All-79043.aspx
There is a new standard coming out that will allow streaming to everything. This will now create a few million more screens.
Its a Friendly wager and Im excited. Social media sites are Ponzi Schemes like you said but due to the hype they make great trades.
NFLX is not a favorite down here but I can see 20% in the foreseeable future. Then a few pull backs. If you can time it every quarter it will make a hell of a trade for the next year.