Your Digital Media Has Never Looked So Good

 
danat275
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Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 3:44 pm

this could be good news for the future of netflix and us as users ....

http://news.yahoo.com/netflix-moving-di ... 00393.html
 
wxman2003
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 7:14 pm

Not if Verizon get their hands on this company.
 
jcmolet
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 8:01 pm

None of the points - the new app on the Nook, video sharing via Facebook, etc. - raised in the article really address Netflix' biggest problem right now, a seriously depressed stock price which affects their access to capital, which in turn affects their ability to extend current content deals and/or sign significant new deals (the costs associated with signing content deals have risen exponentially recently)...and IMO, bringing back Arrested Development is not significant.
 
stratcat96
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 8:16 pm

a lower stock valuation only affects Netflix's capital if they're selling their stock.. The revenue they make from subscribership is what they use to make content deals. Exposing their service to new markets by putting their app on as many devices as they can is what generates more revenue, which in turn gives them capital to get more content, which gets more subscribers, and over and over. As they increase subscribers and content, then their stock prices will start to rise.
 
jcmolet
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 8:46 pm

stratcat96 wrote:
a lower stock valuation only affects Netflix's capital if they're selling their stock.. The revenue they make from subscribership is what they use to make content deals. Exposing their service to new markets by putting their app on as many devices as they can is what generates more revenue, which in turn gives them capital to get more content, which gets more subscribers, and over and over. As they increase subscribers and content, then their stock prices will start to rise.


Their access to capital, not the capital they can raise from selling their stock is what I noted in my post; and their access to capital is absolutely impacted by the stock price. And considering the exponential rise in the cost of acquiring new content or extending current deals, I doubt if the capital acquired from subscriptions alone will be enough to secure deals, significant deals anyway, going forward.

As noted on their most recent 10-K Form (February 2011, page 31), "Although we currently anticipate that cash flows from operations, together with our available funds, will continue to be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain additional financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing."

http://investing.businessweek.com/resea ... OC132054_7

In short, they recognize that like most businesses, there are times when the revenue generated from operations will not be enough to meet the various needs (R&D, new construction, acquisitions, etc.) and you have to access more capital. Potential creditors rely heavily on stock price to determine the amount of lent capital, interest rates, etc. A higher stock price = better access to capital with better terms. A lower stock price = reduced access to capital with less attractive terms.
 
stratcat96
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 9:18 pm

... and they can't raise stock valuations and thereby opening up access to more capital without doing just what they're doing, opening up markets, adding content, and getting their app on every device they can. Armchair analysis of Netflix's business model is fun but they have gotten by this long without needing to rely on internet forum advice. They've made some mistakes just like every other company out there. There was a time when Apple's board of directors was kicking out their CEO due to a three-year stint of record-low stock prices and crippling financial losses. Obviously that all seemed to have worked out for them. They'll be just fine, or they'll die and someone else will take their place. Give em a break and some time to sort out what they're doing
 
jcmolet
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 9:37 pm

stratcat96 wrote:
... and they can't raise stock valuations and thereby opening up access to more capital without doing just what they're doing, opening up markets, adding content, and getting their app on every device they can. Armchair analysis of Netflix's business model is fun but they have gotten by this long without needing to rely on internet forum advice. They've made some mistakes just like every other company out there. There was a time when Apple's board of directors was kicking out their CEO due to a three-year stint of record-low stock prices and crippling financial losses. Obviously that all seemed to have worked out for them. They'll be just fine, or they'll die and someone else will take their place. Give em a break and some time to sort out what they're doing


I for one was not offering Netflx internet forum advice. I happen to believe Netflix will be around for awhile...and probably thrive ultimately. I was simply giving my take on the referenced article, which didn't make a compelling case, IMO, for a major turnaround any time soon. Unlike many in this forum, I'm not drunk on the Netflix kool-aid and have the ability to make a reasoned analysis based on observing the competitive environment and understanding financial filings such as the 10-K.

The first sentence in your first reply to my post, "a lower stock valuation only affects Netflix's capital if they're selling their stock" , indicates that either you didn't read and comprehend what I noted, you don't understand how and why business sometimes need access to capital, or both. In the end, your armchair analysis, while spirited, is simply wrong.
Last edited by jcmolet on Sun Dec 18, 2011 9:43 pm, edited 1 time in total.
 
stratcat96
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 9:43 pm

wow, ok... I'm not "drunk" on Netflix's Kool-aid and haven't been trying trying to insult your esteemed analytic abilities. Your spirited patting of your own back and insultatory insinuations aside, please try and calm down
 
jcmolet
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 9:48 pm

stratcat96 wrote:
wow, ok... I'm not "drunk" on Netflix's Kool-aid and haven't been trying trying to insult your esteemed analytic abilities. Your spirited patting of your own back and insultatory insinuations aside, please try and calm down


That's rich. You make a provocative statement, "Armchair analysis of Netflix's business model is fun but they have gotten by this long without needing to rely on internet forum advice" and then try to play the role of the reasonable adult. Nice.
 
stratcat96
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 10:04 pm

jcmolet wrote:
stratcat96 wrote:
wow, ok... I'm not "drunk" on Netflix's Kool-aid and haven't been trying trying to insult your esteemed analytic abilities. Your spirited patting of your own back and insultatory insinuations aside, please try and calm down


That's rich. You make a provocative statement, "Armchair analysis of Netflix's business model is fun but they have gotten by this long without needing to rely on internet forum advice" and then try to play the role of the reasonable adult. Nice.


I did not address that statement specifically at you but if you took it that way I apologize. I don't believe that I hurled insults of your comprehension, understanding, or intelligence either. Sorry about those too if I did.
 
hozedhead
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Re: Looks like Netflix is on an upswing again.

Sun Dec 18, 2011 11:24 pm

I'm no stock expert but from the looks of things, NF shares were way over-valued for the last year or more. Kudos to those who rode the wave and regularly put stop orders on their shares to make sure they didn't lose their gains. I thought they were takeover bait months ago, but then again, I don't know diddlysquat. It'll be interesting to see what happens in the future.
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Heyitsrick
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Re: Looks like Netflix is on an upswing again.

Mon Dec 19, 2011 6:11 am

I think it's safe to say that "stock price" in and of itself is far too simplistic to be used as a rational basis for determining an ability to raise capital, at least capital at favorable terms. Stocks may have split in the past (perhaps several times), so using that analogy as a be all and end all is quite misleading.

No one, for example, would compare Microsoft stock vs. Apple or Google and say that Microsoft would have a hard time raising capital. Microsoft stock is at $26 at this writing. Apple is at $381 and Google is at $626. Are these companies "worth" 10-20x+ Microsoft? Hardly.

So, it would be more appropriate to make the argument that percentage increases/decreases in stock prices would potentially impact a company's ability to raise capital, or at least look at the price vs. outstanding shares to determine real value.
 
robertm
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Re: Looks like Netflix is on an upswing again.

Mon Dec 19, 2011 10:06 am

An upswing would only be from increasing their subscribers not from increasing their number of streamed hours. The upswing in streamed hours is more of an indication of stabilization.

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