frissonic Posted October 25, 2011 Report Share Posted October 25, 2011 Not sure if y'all are the kind that likes to play the stock market, but Netflix dropped almost 35% today, down to about $78/share. As of about the beginning of July, it was trading around $300. I’m gonna track it over the next few days and see if it rebounds. If it does, I’m buying. Reasons for buying: Today there was an announcement that Netflix lost about 800,000 subscribers over the last quarter. That’s a LOT more than they thought they’d lose. It’s understandable that so many jumped ship: splitting up the DVD/streaming options to the tune of about a 60% increase for most those subscribers, I’d be considering other options as well. HOWEVER, having said all that, it’s *Netflix* … the pioneer in door-to-door movie rental AND media streaming. I see no reason to assume that they won’t find some other way to innovate their service and continue to keep it viable. $300/share for this kind of service is unreal. XM/Sirius have been around nigh unto a decade, and they can’t seem to breach the $5-10/share, even though they were predicted to skyrocket in 2002/2003 to about $100-150 a share. Amazon’s trading is pretty stable, even with their addition of 100,000+ movies/tv shows to their prime account subscribers. Blockbuster/Dish? Blah. No one’s interested in a satellite provider who can’t be bothered to broadcast more than a couple handfuls of HD channels, not to mention the constant squabbling with regional sports providers over what content can be broadcast through them. No, Netflix is where it’s at, and I bet they rebound nicely over the next year or so. And no—I have no idea why I’m writing this. :blush: Maybe I need some lunch. Link to comment Share on other sites More sharing options...
Claude_Verret Posted October 25, 2011 Report Share Posted October 25, 2011 I buy / sell some stocks now and then, but it's only with money that I can afford to lose like when I was in Vegas last week. Outside of that I have no opinion on buying Netflix stock. Link to comment Share on other sites More sharing options...
qwksndmonster Posted October 25, 2011 Report Share Posted October 25, 2011 I have a stupid stock trading game in my econ class. So I'll just put all of my money into netflix and ramen noodles. Link to comment Share on other sites More sharing options...
wonderbread Posted October 25, 2011 Report Share Posted October 25, 2011 Not sure if y'all are the kind that likes to play the stock market, but Netflix dropped almost 35% today, down to about $78/share. As of about the beginning of July, it was trading around $300. I’m gonna track it over the next few days and see if it rebounds. If it does, I’m buying. Reasons for buying: Today there was an announcement that Netflix lost about 800,000 subscribers over the last quarter. That’s a LOT more than they thought they’d lose. It’s understandable that so many jumped ship: splitting up the DVD/streaming options to the tune of about a 60% increase for most those subscribers, I’d be considering other options as well. HOWEVER, having said all that, it’s *Netflix* … the pioneer in door-to-door movie rental AND media streaming. I see no reason to assume that they won’t find some other way to innovate their service and continue to keep it viable. $300/share for this kind of service is unreal. XM/Sirius have been around nigh unto a decade, and they can’t seem to breach the $5-10/share, even though they were predicted to skyrocket in 2002/2003 to about $100-150 a share. Amazon’s trading is pretty stable, even with their addition of 100,000+ movies/tv shows to their prime account subscribers. Blockbuster/Dish? Blah. No one’s interested in a satellite provider who can’t be bothered to broadcast more than a couple handfuls of HD channels, not to mention the constant squabbling with regional sports providers over what content can be broadcast through them. No, Netflix is where it’s at, and I bet they rebound nicely over the next year or so. And no—I have no idea why I’m writing this. :blush: Maybe I need some lunch. I have some AOL stock if you want it. Link to comment Share on other sites More sharing options...
frissonic Posted October 25, 2011 Author Report Share Posted October 25, 2011 I have some AOL stock if you want it. trade ya for toilet paper. it's two-ply. Link to comment Share on other sites More sharing options...
Ghost of Dwight Drane Posted October 25, 2011 Report Share Posted October 25, 2011 I'll give you a little breakdown, take it for what it's worth. I've never owned it, and would never own a stock like this. I stick to smaller companies with more tangible value as opposed to giant growth stories. Doesn't mean they are all bad, just not for me. On a technical basis, this will do one of two things in the near term. It will go down to $60 or so, or back up to $90 and then probably $100. It has done such a freefall from any recent level that you have to go back 2 years to get a feel for the chart, and that is what I see. The company itself....it's real tangible value is $2 per share. They were growing bottom line at 30%, but as you now see, that wasn't maintained. That's the problem with stocks like these....a lot of things built on hope. You can have a great business model and be the best in a sector, but it does not justify the stock price. They were making $3 a share or so....and sure, if they continued to grow at such a rapid rate, great. Just like Sirius though, there are limits eventually and people excited about the service and a great PR push can separate many investors from their money. In my entire life I never had so many people ask me about a stock like when Sirius was running. If you want to invest long term, be careful. If you are looking to gamble, maybe options are the better route. You can buy November 90 calls at $2.60 right now. I don't know how familiar you are in that realm, but if this thing gets back to $100 over the next 3 1/2 weeks, you quadruple your money or better. If it never gets to $90 and you hold the whole way, you lose everything. If it were me trading, I wouldn't wait for it to go up and then buy it. If I loved the company I would buy a little now and then double down as it approached $60. If you wait for it to go up and buy in the $90-100 range, you may be getting the short term top. My gut says they may gut this towards $60 right now. If it plummets below that, good luck. Just be careful with any "investing". The world ain't what it used to be. Link to comment Share on other sites More sharing options...
freester Posted October 25, 2011 Report Share Posted October 25, 2011 Not sure if y'all are the kind that likes to play the stock market, but Netflix dropped almost 35% today, down to about $78/share. As of about the beginning of July, it was trading around $300. I’m gonna track it over the next few days and see if it rebounds. If it does, I’m buying. Reasons for buying: Today there was an announcement that Netflix lost about 800,000 subscribers over the last quarter. That’s a LOT more than they thought they’d lose. It’s understandable that so many jumped ship: splitting up the DVD/streaming options to the tune of about a 60% increase for most those subscribers, I’d be considering other options as well. HOWEVER, having said all that, it’s *Netflix* … the pioneer in door-to-door movie rental AND media streaming. I see no reason to assume that they won’t find some other way to innovate their service and continue to keep it viable. $300/share for this kind of service is unreal. XM/Sirius have been around nigh unto a decade, and they can’t seem to breach the $5-10/share, even though they were predicted to skyrocket in 2002/2003 to about $100-150 a share. Amazon’s trading is pretty stable, even with their addition of 100,000+ movies/tv shows to their prime account subscribers. Blockbuster/Dish? Blah. No one’s interested in a satellite provider who can’t be bothered to broadcast more than a couple handfuls of HD channels, not to mention the constant squabbling with regional sports providers over what content can be broadcast through them. No, Netflix is where it’s at, and I bet they rebound nicely over the next year or so. And no—I have no idea why I’m writing this. :blush: Maybe I need some lunch. I would stay away. Put your money in something low risk and safe. Amazon has a better streaming product. Netflix is being compared to AOL stock. Also the stock still trades at a multiple of 19 and is investing in the european market which is about ready to collapse. The larger question here is whether Netflix will be a bargain at some point--even a screaming buy. The five-year chart shows little support until $50 so things could get worse. But the long-term story of Netflix's move to streaming service and international markets makes sense. Navigating the shift could be tricky. Hastings likened the DVD business to AOL's dial-up service--a good business that will decline over time. On the third quarter conference call with analysts Hastings said: Link to comment Share on other sites More sharing options...
frissonic Posted October 25, 2011 Author Report Share Posted October 25, 2011 I'll give you a little breakdown, take it for what it's worth. I've never owned it, and would never own a stock like this. I stick to smaller companies with more tangible value as opposed to giant growth stories. Doesn't mean they are all bad, just not for me. On a technical basis, this will do one of two things in the near term. It will go down to $60 or so, or back up to $90 and then probably $100. It has done such a freefall from any recent level that you have to go back 2 years to get a feel for the chart, and that is what I see. The company itself....it's real tangible value is $2 per share. They were growing bottom line at 30%, but as you now see, that wasn't maintained. That's the problem with stocks like these....a lot of things built on hope. You can have a great business model and be the best in a sector, but it does not justify the stock price. They were making $3 a share or so....and sure, if they continued to grow at such a rapid rate, great. Just like Sirius though, there are limits eventually and people excited about the service and a great PR push can separate many investors from their money. In my entire life I never had so many people ask me about a stock like when Sirius was running. If you want to invest long term, be careful. If you are looking to gamble, maybe options are the better route. You can buy November 90 calls at $2.60 right now. I don't know how familiar you are in that realm, but if this thing gets back to $100 over the next 3 1/2 weeks, you quadruple your money or better. If it never gets to $90 and you hold the whole way, you lose everything. If it were me trading, I wouldn't wait for it to go up and then buy it. If I loved the company I would buy a little now and then double down as it approached $60. If you wait for it to go up and buy in the $90-100 range, you may be getting the short term top. My gut says they may gut this towards $60 right now. If it plummets below that, good luck. Just be careful with any "investing". The world ain't what it used to be. not at all familiar with the "november 90" concept, but i'm trying to catch up a la google searches, etc. is that an option on sites like fidelity? Link to comment Share on other sites More sharing options...
SwampD Posted October 25, 2011 Report Share Posted October 25, 2011 Just be careful with any "investing". The world ain't what it used to be. Buy - "Investing", A good product and story is still worth something. Sell - "Trading", Creates artificial value and too easily manipulated. Hold - "Lottery tickets", since I'm not allowed to buy and sell stocks (except for 1 month a year so why bother) this is where I put all my money for my retirement. Link to comment Share on other sites More sharing options...
Ghost of Dwight Drane Posted October 25, 2011 Report Share Posted October 25, 2011 not at all familiar with the "november 90" concept, but i'm trying to catch up a la google searches, etc. is that an option on sites like fidelity? If you aren't familiar....then you probably shouldn't be doing it. If stocks are jalapenos....options are habeneros...and derivatives are ghost peppers. Buying an option in a stock like this is a pure "gamble". What options are is that they give you the rights to buy or sell a stock at that price, any time before those rights expire. A call is the right to buy the stock, a put is the right to sell a stock if you think it will go down. So in the example I listed, I stated a way to play NFLX if you thought it would rebound quickly is to buy the November 90 call options. Stock options expire the 3rd Friday of the month. So it would be a short term gamble between now and November 18th. For $2.60, at least when I looked earlier and the stock was trading around $77, you have the right to buy a share of NFLX at $90 any time between now and Nov. 18. If the stock continued to go down, the value of the option would decrease as well. If Nov 18 hit and the stock never gets to $90 and you still have the option, it is worthless. If however the stock went to say $100 on Nov 17th, it would be worth $10....100-90. If lightning in a bottle struck and the stock went to $100 overnight, the option would be worth $12 or so since there is added value in the time remaining until November for someone to buy into the stock without having to put up $100 in cash. Where it becomes a trading vehicle is all points inbetween. If NFLX made it to $90 over the next week, you would probably more than double your money even though technically you can just go buy the stock at $90.....again, that is the magic of only having to put up $5 instead of $90. Options in general are very volatile, and even more in stocks like this. It isn't a good idea for the average person to even come close to touching these. If you are a gambling man, you could go looking at options. They trade in bunches of 100 shares, so if you did buy 1 option contract in this example, it would cost you $260 for the right to buy 100 shares. Commission is usually more on things like this as well, so remember that. Many brokerages won't let you trade options depending on the account you have and forms you filled out with them. I don't know how much of that you digested, but be careful around this stock no matter what. And to give you an example of how options can kill you if you get in too deep, a younger Mr. Drane in a matter of 72 hours managed to dig a hole so big, it took 3 years to get out of. If the group I worked for wasn't as crazy as I am, i would have been fired. Link to comment Share on other sites More sharing options...
Claude_Verret Posted October 27, 2011 Report Share Posted October 27, 2011 I came across this today.. Netflix provides remedial lessons for investors The dramatic collapse of the price of the stock of a company that at one time could do no wrong is a harsh reminder that investing in individual companies has much more to do with speculation than investing. While concentrating your portfolio in a limited number of stocks is the surest way to create a small fortune, it’s also the surest way to turn a large fortune into a small one. And the historical evidence on the results of the stock-picking skills of individual investors demonstrates that it is also the triumph of hype and hope over wisdom and experience. Link to comment Share on other sites More sharing options...
LGR4GM Posted October 27, 2011 Report Share Posted October 27, 2011 Netflix just sent out and Email that they are raising the price of daily dvd rentals to 1.20$ per day... dont know if that makes a difference but figured I would let ppl know. "Starting on Monday, October 31, the daily rental charge for DVDs will change to $1.20 a day.* The price change is due to rising operating expenses, including new increases in debit card fees. Daily rental charges for Blu-ray™ Discs and video games won't change.** Additional-day charges for DVDs rented before 10/31 won't be affected, either. " Link to comment Share on other sites More sharing options...
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