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I don't think they see a possible recovery for Netflix here.

• francisofascii 5y ago
  It is that? Or maybe they discovered whatever model they had setup for Netflix was flawed, and they just decided to dump it and move on.
  • formerkrogemp 5y ago
    Most valuations these days are predicated upon market sentiment, low interest rates, rapid growth, and forecasts into future cash flow growth. Should any of these crash into reality, the proverbial faeces hit the fan, and the valuations disappears like the smoke and mirrors they are. Nothing grows 20% YoY forever. It's all unicorn farts and VC pixie dust powering these high flying valuations.
    • francisofascii 5y ago
      Sure, many companies have this problem. But does Netflix? They have been making a profit for quite some time. They PE ratio is 20, which is not high compared to other companies. Do they need to grow to be profitable? If they can cut costs a bit and stabilize subscription levels, they should be fine. What am I missing?
      • formerkrogemp 5y ago
        The growth is baked into the valuation. I don't disagree with your ideas, but so much is built on perception. Share prices fall. Capital becomes more expensive. Options aren't worth as much. Employee morale drops. Profit isn't the only or main measure of success these days, which is unfortunate. As a long term shareholder, I'd be somewhat concerned about their ability to compete and deliver, but I'd be fine with their current profit levels. Not at current valuations however.