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Good article on NFLX


Eric50

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Also, would T-Bone, Stove, Watsa, and Eric50 care to give us an update on their positions? I think we would all like to hear from the prophets themselves.

 

Second, T-bone and Stove especially, have any of you adopted risk control, as I have suggested, or are you still in the throes of confirmation bias?

 

My position hasn't change since I last posted.  I have a put spread that expires in 2012, entered into when the stock was at 170-180.  Loss was limited to that put spread.  I have no remaining exposure to NFLX.

 

I'm not sure what your reason for posting that is since supposedly all you cared about before was "risk control," and not whether the stock actually went up or down, when I clearly stated I used position size limits and put contracts to limit risk. 

 

 

^^Last post on the topic

 

Believe some on this board are owed an apology from HarryLong.  $86 AH print.

 

 

 

I'd actually consider opening a long position based on valuations at sub-80 levels, IF it were not for fears regarding their business model (no real moat) that was part of the original short thesis. 

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I wouldn't rush to buy netflix just because it's down huge this year.

 

This is still a company that is trading at over 1.5 EV/Sales if you annualize their best quarter. They've got huge content costs they'll have to take on, costs that are rising (a billion $ for some CW shows?!?). They are losing subscribers and have competitors coming at them from all sides.

 

Margins and revenue will be under attack, with an inexperienced and overrated CEO at the helm, and a shareholder base that still has to fully transition from momentum funds to value funds/retail investors. There will be further pain.

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NFLX 87$ wow did Whitney mess up!

 

Was he long? 

 

Boring repetitions of old ideas (BRK), stealing ideas without adding much value which you could expect from such a guy, weird picks and a lot of free time on his hands to make endlessly long presentations. Not sure what to think of this guy at times...

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We bought puts in Jan 2011...as we disclosed on this thread I believe.....we were early!

 

We did not capitalize on the this huge fall unfortunately. I would look at buying more puts...I think their model is flawed.....short squeezes are scary however!

 

Dazel

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"Our revenue and profits in Q4 will be lower than we had anticipated, but we'll remain profitable on a global basis. In Q1'12 we'll be launching in the UK and Ireland, as we had planned. For a few quarters starting in Q1, we expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis;that is domestic profits will not be large enough to both cover international investments and pay for global G&A and Technology & Development. After launching the UK and Ireland, we will pause on opening new international markets until we return to global profitability. we plan to do that by increasing our global streaming subscriber base faster than we increase our costs."

 

That should keep traders (like me) away from it for a while.

 

http://files.shareholder.com/downloads/NFLX/1462764441x0x511277/85b155bc-69e8-4cb8-a2a3-22465e076d77/Investor%20Letter%20Q3%202011.pdf

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Were short NFLX and I am not even going to mention at what price as most will not believe it.

 

As I mentioned in the weekend thread these are our shorts:

 

And btw of course we always have a short book, we are short LULU, NFLX, BIDU, LNKD and we even jumped on the GMCR trade after Einhorn. We always manage some short exposure. A value investor shorting is selling .50 cents for a dollar, it is no different than buying long, except that you can lose more than you put out. Our short book is maybe 5-10% of AUM and the net contribution is generally negligible.

 

 

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And btw of course we always have a short book, we are short LULU, NFLX, BIDU, LNKD and we even jumped on the GMCR trade after Einhorn. We always manage some short exposure. A value investor shorting is selling .50 cents for a dollar, it is no different than buying long, except that you can lose more than you put out. Our short book is maybe 5-10% of AUM and the net contribution is generally negligible.

If you are short LNKD, what do you think of P? I think AWAY is also part of that same batch.

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Wow, down 37% this morning, this is some reaction. I said F**k it and covered this morning at 75 and change. I wouldn't go long but this short thesis has worked for the most part.

 

I bet this is a very frustrating morning over at the T2 offices.

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  • 3 months later...

Netflix CEO Reed Hastings said he expects Amazon to significantly expand its video streaming service and offer it at a cheaper price in a bold move to compete directly with his company.

 

The future of streaming online video is the main battleground and Netflix's competitors including everyone from Amazon to Hulu to Vudu to Blockbuster to services that perhaps have not even launched yet are ready to have their content delivered to any screen, any time, any where.

 

********************************************************************************

Will Amazon Challenge Netflix?

By Swanni

 

Washington, D.C. (January 26, 2012) --  http://www.tvpredictions.com/amnet012612.htm

 

 

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  • 2 weeks later...
Guest HarryLong

Also, would T-Bone, Stove, Watsa, and Eric50 care to give us an update on their positions? I think we would all like to hear from the prophets themselves.

 

Second, T-bone and Stove especially, have any of you adopted risk control, as I have suggested, or are you still in the throes of confirmation bias?

 

My position hasn't change since I last posted.  I have a put spread that expires in 2012, entered into when the stock was at 170-180.  Loss was limited to that put spread.  I have no remaining exposure to NFLX.

 

I'm not sure what your reason for posting that is since supposedly all you cared about before was "risk control," and not whether the stock actually went up or down, when I clearly stated I used position size limits and put contracts to limit risk. 

 

 

^^Last post on the topic

 

Believe some on this board are owed an apology from HarryLong.  $86 AH print.

 

 

 

I'd actually consider opening a long position based on valuations at sub-80 levels, IF it were not for fears regarding their business model (no real moat) that was part of the original short thesis.

 

In late July I wrote (on this thread).

 

 

Has anyone decided to adopt risk control after the big continuation of the move up in Netflix?

 

I was wrong on Google, no question about it. I do try to take my lumps quickly. Has anyone who was short NFLX decided that risk control is a good idea after all?

 

Everyone who had so much conviction on the short side in this thread seems oddly silent on risk control. Maybe it's a good contrary indicator, and I should start to wait for a NFLX short trade  ;)

 

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Guest HarryLong

If you look at the data, I actually wrote those words some days after what turned out to be the top. When the shorts were silent turned out to be a great contrary indicator  ;D

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  • 4 months later...

Anyone consider NFLX a buy at this price ?

 

Analyst at Oppenheimer said it is still a buy. He said "if you takes out international's losses , NFLX is trading at 11-12x earning"

http://video.cnbc.com/gallery/?video=3000094903&play=1

 

The short interest is still high on NFLX .The same % as when it was almost $300 last year

http://www.nasdaq.com/symbol/nflx/short-interest

 

A lot of articles on SA bashing the company.But most them are repetitive. Only  few positive articles on Netflix on SA but most of the comments were filled with haters.

http://seekingalpha.com/symbol/nflx/in-focus

 

The contribution margin% of the Q1 of streaming business was actually improved from Q4 last year (13% vs. 10%). 

http://ir.netflix.com/common/download/download.cfm?companyid=NFLX&fileid=562052&filekey=df0733e0-5de0-4bef-8c1f-87580229e303&filename=Q1_12_Financials_Statements.xls

 

It is amazed that Netflix becomes one of most hated stock in SA and Yahoo MB. There is a website created solely to attack Nflx and Reed Hastings. The company is the same company back in 1 year ago but the sentiment is changed dramatically. Reed made a couple of bad decision last year and now some calls him and inexperienced CEO. 

 

 

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I have a small number of 2014 $90 calls.  In 2010 before the last run-up I bought some $120 2012 calls and made out quite well even if I sold way too early (I only tripled my investment), of course if I had kept them until NFLX was over $300 It would have been the trade of a lifetime.  It's a good asymmetric bet. If things get crazy again and netflix runs up in price I will make out very well again, if not I won't lose much.

 

--Eric

 

 

Anyone consider NFLX a buy at this price ?

 

Analyst at Oppenheimer said it is still a buy. He said "if you takes out international's losses , NFLX is trading at 11-12x earning"

http://video.cnbc.com/gallery/?video=3000094903&play=1

 

The short interest is still high on NFLX .The same % as when it was almost $300 last year

http://www.nasdaq.com/symbol/nflx/short-interest

 

A lot of articles on SA bashing the company.But most them are repetitive. Only  few positive articles on Netflix on SA but most of the comments were filled with haters.

http://seekingalpha.com/symbol/nflx/in-focus

 

The contribution margin% of the Q1 of streaming business was actually improved from Q4 last year (13% vs. 10%). 

http://ir.netflix.com/common/download/download.cfm?companyid=NFLX&fileid=562052&filekey=df0733e0-5de0-4bef-8c1f-87580229e303&filename=Q1_12_Financials_Statements.xls

 

It is amazed that Netflix becomes one of most hated stock in SA and Yahoo MB. There is a website created solely to attack Nflx and Reed Hastings. The company is the same company back in 1 year ago but the sentiment is changed dramatically. Reed made a couple of bad decision last year and now some calls him and inexperienced CEO. 

 

 

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