NFLX short interest has now increased to 75% of the float from 53% last month. Here's the chart:
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Here is what the WSJ has to say:
The WSJ's "Tracking the Numbers" column highlights Netflix and its litany of problems. The co faces several challenges, including price war with Blockbuster and Amazon efforts to enter into movie rental mkt. With all these threats to Netflix's business, it is no wonder that short sellers have continued to pile on. According to the article, in Dec. 19.1 mln shares, or about 3/4 of the shares, are sold short. Netflix has built a loyal following and has been briskly adding new subscribers to its rolls, despite the alternatives open to consumers. The co raised its 4Q rev forecast slightly in mid-Nov, based on better-than-expected subscriber growth. Netflix said it expects to end the 4Q with as much as 2.65 mln subscribers. Aided by the price cut, Netflix has said that its churn is nearing historically low levels. Netflix spokeswoman Shernaz Daver argues that the co is well-positioned to succeed because of its single-minded focus on the online DVD-rental mkt, whereas co's like Blockbuster have other businesses competing for their attention. Netflix has the largest number of titles available and it delivers what customers want, she said. The co is also adding features, such as a way to share movie recommendations with friends, that will increase customer loyalty. "There's a groundswell and base we're building upon," Ms. Daver said. "Next year is going to be a land grab." Article also highlights analyst community view on Netflix, which is slightly cautious.
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