The longer-term issue facing Netflix has been management's decision to use debt ($12.6 billion at June 30th, after issuance of $9.2 billion in debt in the past two-and-a-half years) to finance the company’s massive content liability ($8.4 billion at June 30th.)
If Netflix can grow earnings at a 74% pace, as is implied by the consensus forecasts for 2020 and 2019, that debt can be financed. If not, Netflix is going to start looking a lot like Tesla. As I have mentioned in manyTesla shares are massively overvalued, but the market has at least partially realized that, sending Tesla shares down 20% in the past year. In contrast Netflix shares were trading at $64 per share in September 2014 versus the $268 level at which the shares are trading hands today.
So, by pricing Tesla shares lower on September 20, 2019 than they were on September 20, 2014—a period in which the Nasdaq 100 has doubled—the market has told Elon Musk that Tesla simply does not have the balance sheet strength to fight off much larger and appropriately-capitalized competitors such as GM, VW and Daimler. Well, I can’t think of two better-capitalized competitors than Apple and Disney, and Amazon, Comcast, Facebook and Alphabet are hardly starving for cash, either.
So, is it time for the market to deliver the harsh message to Reed Hastings that it has–”funding secured” shenanigans, aside–delivered to Musk in the past five years? I believe the answer is “yes” and I am working on short strategies involving Netflix shares for my new trading venture, Excelsior Capital Partners.
I have spent my entire adult life time analyzing companies, and I have learned that competitive pressures tend to show up in a company’s margins before it loses market share. Reed Hastings may be right that Netflix only has 5% of viewing hours, and therefore has not nearly reached saturation, but Netflix doesn’t charge per-hour, per-day or per-show. No, Netflix charges per subscriber, and those subscribers are being confronted with new options.
Netflix has become an international growth story. Netflix’s domestic subscriber count actually declined in the second quarter and NBCUniversal all can produce original content with costs that barely register on their massive corporate balance sheets. Disney can also throw content from Marvel, Pixar, Lucasfilm as well as their corporate brand at the consumer.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
Meet the Women Leading Netflix Into the Streaming WarsA new report on the state of the streaming wars shows that we can expect women to pack the Emmy stage for years to come, especially because Netflix's original content department is run by a team of women: Via FortuneMagazine
Consulte Mais informação »
Netflix shares set for worst quarter since 2012 as competition loomsShares of Netflix dropped nearly 4% on Tuesday and were on track for their deepe...
Consulte Mais informação »
El Camino Takes Breaking Bad To The Next Level In Gritty New TrailerTheories about Netflix's movie spin-off of the TV show are already flying.
Consulte Mais informação »
OITNB's Danielle Brooks Reveals the Sex of her BabyOrange Is the New Black's Danielle Brooks Reveals the Sex of Her Baby During Epic Dance Party
Consulte Mais informação »
The Scariest Horror Movies & Series to Stream on Netflix for HalloweenThe Scariest Horror Movies and Series to Stream on Netflix for Halloween
Consulte Mais informação »
Weigh In On Mixed-ish and EmergenceShare your thoughts on ABC's new shows that debuted on Tuesday, September 24
Consulte Mais informação »