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Technology Stocks : Netflix (NFLX) and the Streaming Wars -- Ignore unavailable to you. Want to Upgrade?

To: CFA who wrote (187)	3/1/2005 4:13:24 PM
From: Dave	Read Replies (1) \| Respond to of 2280

Sigh. We'll see about how the $14.99 price point works for BBI. My thoughts are that this price point will cause them to lose more money and create disgruntled franchisees. We'll find out in a week. Haven't we now learned one cannot make it up on volume if you sell below your marginal cost. No comments on the Asset Turnover I assume. In fact, NFLX Asset Turnover is nearly double. That basically shows how much more efficient that NFLX is at squeezing a dollar of revenue out of their assets. BBI's store base is going to cause them some harm. By the way, as of September 2004, NFLX generated 38m in Free Cash Flow and, on the other hand, BBI generated 40m in Free Cash Flow by September. The key is that NFLX generated more Free Cash Flow as a percentage of revenue. Of course, their price increase is included, but as of FY 04, but CapEx as a percent of revenue for NFLX was 27% as of the end of their FY. BBI on the other hand 29.6%.