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Everything I've seen from Netflix tells me they get it. They fucked up on a couple tactical moves, but they know where the future is and are positioning themse

Everything I've seen from Netflix tells me they get it. They fucked up on a couple tactical moves, but they know where the future is and are positioning themselves to be there. Even the second stock offering makes sense in the long run: better to maintain market share and grow the market than to tighten the belt and focus on high-margin offerings at the cost of the platform, especially when competitors are making big investments. Had I a few dollars to invest, Netflix at a 74% discount seems like a pretty sweet long-term deal. If they pull it out I make out like a thief, and if the stock drops much lower they become a very tempting acquisition target for Amazon/Apple, or possibly even Google.

wheels 15y ago
> Netflix at a 74% discount The missing piece of data is that Netflix was massively overvalued before, and that now they've just jumped down to a very normal price to earnings ratio. Just for comparison: NFLX P/E: 15.49 AAPL P/E: 14.12 MSFT P/E: 9.33 GOOG P/E: 21.26 AMZN P/E: 101.21 Amazon and Netflix were the two before which completely stratospheric prices, and now Netflix has come back down to earth. From what I've read, lots of hedge funds were shorting Netflix since they figured this had to happen eventually.
- sneak 15y ago
  Visualized: http://ycharts.com/companies/NFLX/pe_ratio#compCos=AAPL,MSFT,AMZN,GOOG http://ycharts.com/companies/NFLX/pe_ratio#compCos=AAPL,MSFT...
- dereg 15y ago
  That's not how you use P/E ratios, which are totally irrelevant when comparing firms with entirely different revenue and cost sources.
jonnathanson 15y ago
"...they become a very tempting acquisition target for Amazon/Apple, or possibly even Google." Or Microsoft. They're not the prettiest girl at the dance anymore, and they don't get a lot of love on these pages. But they've quietly positioned themselves as a very serious force in the entertainment space with the XBox platform. And they've been known to throw big chunks of their warchest at strategic acquisitions. Facebook may also be a potential buyer. They've got a huge userbase that they need to keep engaged, and if they acquired a blue-chip content platform, it would be a huge deal. Amazon, absolutely. Makes total sense for them across so many dimensions. Apple, yes and no. Owning Netflix would be nice, but their hands would be tied on how to leverage it. How do you use Netflix to sell iPads, because restricting it to iPads is not a viable option? Doing so would piss off the entire userbase -- possibly devaluing the platform fundamentally, and giving competitors a major opening. They might be able to offer some sort of premium tier that is available only on Apple devices. But even that would be iffy as a draw. Then they've got the issue of how to make Netflix and iTunes live together in a coherent, cohesive, sensible way. I could, however, see Apple's buying Netflix as a purely defensive maneuver if Amazon made a bid. Google, I could see pretty easily. They've been trying to make premium content deals for years now. Netflix could make sense for G+, YouTube, Android, etc.
- smackfu 15y ago
  I heard an NPR report that XBox 360 streaming is half of the Netflix bandwidth during primetime.

wheels 15y ago

> Netflix at a 74% discount The missing piece of data is that Netflix was massively overvalued before, and that now they've just jumped down to a very normal price to earnings ratio. Just for comparison: NFLX P/E: 15.49 AAPL P/E: 14.12 MSFT P/E: 9.33 GOOG P/E: 21.26 AMZN P/E: 101.21 Amazon and Netflix were the two before which completely stratospheric prices, and now Netflix has come back down to earth. From what I've read, lots of hedge funds were shorting Netflix since they figured this had to happen eventually.

sneak 15y ago
Visualized: http://ycharts.com/companies/NFLX/pe_ratio#compCos=AAPL,MSFT,AMZN,GOOG http://ycharts.com/companies/NFLX/pe_ratio#compCos=AAPL,MSFT...
dereg 15y ago
That's not how you use P/E ratios, which are totally irrelevant when comparing firms with entirely different revenue and cost sources.

jonnathanson 15y ago

"...they become a very tempting acquisition target for Amazon/Apple, or possibly even Google." Or Microsoft. They're not the prettiest girl at the dance anymore, and they don't get a lot of love on these pages. But they've quietly positioned themselves as a very serious force in the entertainment space with the XBox platform. And they've been known to throw big chunks of their warchest at strategic acquisitions. Facebook may also be a potential buyer. They've got a huge userbase that they need to keep engaged, and if they acquired a blue-chip content platform, it would be a huge deal. Amazon, absolutely. Makes total sense for them across so many dimensions. Apple, yes and no. Owning Netflix would be nice, but their hands would be tied on how to leverage it. How do you use Netflix to sell iPads, because restricting it to iPads is not a viable option? Doing so would piss off the entire userbase -- possibly devaluing the platform fundamentally, and giving competitors a major opening. They might be able to offer some sort of premium tier that is available only on Apple devices. But even that would be iffy as a draw. Then they've got the issue of how to make Netflix and iTunes live together in a coherent, cohesive, sensible way. I could, however, see Apple's buying Netflix as a purely defensive maneuver if Amazon made a bid. Google, I could see pretty easily. They've been trying to make premium content deals for years now. Netflix could make sense for G+, YouTube, Android, etc.

smackfu 15y ago
I heard an NPR report that XBox 360 streaming is half of the Netflix bandwidth during primetime.