Friday, February 4, 2011

Netflix (NFLX) Hits New All Time High

For no particular reason, Netflix is hitting a new all time high today. Market cap is now $11.6 billion.

No one seems to care about the problems with the business model.

No position except amazement.

7 comments:

Taylor Conant said...

CP,

Now that things are calming down in Egypt, it's surely only a matter of time before Mubarak turns everyone's internet back on and the delightful Egyptian people can all get back to renting and watching movies via Netflix.

Maybe Mubarak will even introduce a State Netflix Subsidy (SNS) to show the people he is a changed man, and the stock price is reflecting this information which has not yet become news.

CP said...

Egyptian Belly Dancing for Beginners is available on watch instantly!

Eric said...

Just like the stock market and the economy are two different things -- i.e. they need not mesh, or show any kind of correlation -- so too the share price of NFLX and your opinion of their business prospects.

CP said...

You do realize this is a value investing blog, right?

Also, over the long term, those things DO "mesh". Especially the values of companies.

Wait till you get everything NFLX offers for free with an Amazon Prime account.

John said...

Well - subscriber growth is at 60% year over year, they are expanding internationally and coinstar (Redbox) just announced a Q4 miss and lowered guidance.

Seems reasonable you can't find any reason they would be doing well...

Eric said...

You do realize this is a value investing blog, right?

You put up a lot of generally bearish market commentary. In fact, this makes up a big majority of the content.

CP said...

The bearish commentary is informed by concerns about valuation.

For example, the capital gains in the U.S. stock market since 1932 (the great bull market that everyone extrapolates in perpetuity) have come in large part from a fall in the dividend yield from 13% to the current level.