Netflix (NFLX) and the Streaming Wars Message Board

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Technology Stocks : Netflix (NFLX) and the Streaming Wars

NFLX 108.88

-1.0%

10:27 AM EST

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To: ChrisGillette who wrote (655)	11/22/2011 12:31:21 PM
From: i-node	Read Replies (2) of 2280

>>> Not sure where NFLX will trade in the short-run, but I think it will return to $200 over the next 2-3 years. You're dreaming. Management has over-spent on content based on an assumption that growth would continue, and it didn't continue. They blew the critical decision of ramping up content cost vs. anticipating growth. We'll see a stream of bad news for next couple of years. They had a really good chance, but companies make this blunder all the time. We saw Sirius make the same mistake with Howard Stern (and XM was ultimately drawn into it under the guise of "competing"). It could take years for NFLX to recover and by that time, the opportunity will have passed -- streaming will be the business, everyone will be in it, and whatever technology advantage NFLX had will have been caught and maybe surpassed by others. These heavy fixed cost burdens of content costs will require more dilution and more debt and the stockholders will obviously be the losers. I was lucky enough (sheer luck, I might add) to bail at the top and I love the company, but its time has passed unless something really, really radical happens (not quite sure what that would be).

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