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Off-Topic Netflix shares crater 25% after company reports it lost subscribers for the first time in more than 10 years

SpikeUM said:
@wspcane @OriginalCanesCanesCanes

The first season or two of money Heist is pretty good, same with Broadchurch. Perhaps my favorite show is Bodyguard, but in general, the newer stuff is nowhere as good as their older offerings.
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Broadchurch was EXCELLENT. The female detective was Queen Elizabeth in the most recent seasons of The Crown. Absolutely needed subtitles for that show despite being in English. Maybe some of our Canes across the pond wouldn't have!
 
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wspcane said:
Broadchurch was EXCELLENT. The female detective was Queen Elizabeth in the most recent seasons of The Crown. Absolutely needed subtitles for that show despite being in English. Maybe some of our Canes across the pond wouldn't have!
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Watch The Bodyguard
 
OriginalCanesCanesCanes said:
Of course it’s gambling, in a sense. The only difference is at the end, you still have something. Real gambling, as I see it casino type gambling, is usually an all or nothing deal.

But if I think if I understand what you’re getting at, investing, I think in your definition, is more conservative. Basically, one approach might be using an asset allocation and/or dollar cost averaging method to increase your net worth over time. Irrespective of the investment vehicle.

But there are a lot of ways to look at investing, that’s a **** of a rabbit hole to go down.
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Good points. I dont want to own Netflix right now, for any period of time, which is why I called it gambling.

I usually have one of two strategies when investing; long term holds (private equity, super high quality stocks, etc.) and "trades", which are shorter term but still typically months if not 1-2 years (EM, Sectors such as bio, gold, commodities etc.). However, investments do shift between buckets, and Gold and Commodities might now be in a super cycle and long term holds.
 
wspcane said:
Their foreign stuff has been good (i.e. what they have found, bought US rights to, and you can either dub or subtitle). They also did alright with shows that were cancelled by networks and continuing them. They bought the rights to the Harlan Corbin adaptations. Those are not bad. The murder/true crime documentaries get a little old after a while. They need more Black Mirror already.

If you are ok with dubs/subtitles and like more dystopian/sci fi type of stuff, Dark was amazing.
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The foreign films are good, but I cannot stand to watch a movie and the lips don't match the words, so I cannot watch them any longer. I would rather have subtitles
 
SpikeUM said:
Thats called gambling, not investing
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Its really only gambling if you are buying purely because it dropped so fast and look at nothing else regarding the stock. If you look at the companies fundamentals and believe the stock is undervalued. It really isn't gambling.
 
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Everyone is just glossing over the fact that they actually had 500k more subscribers, but they also lost 700k subscribers from Russia because they suspended service over there. Netflix has done a lot wrong(as has been discussed here-content, botched anti piracy rules, etc.), but none of that was the main reason behind this huge drop.
 
OriginalGatorHater said:
Its really only gambling if you are buying purely because it dropped so fast and look at nothing else regarding the stock. If you look at the companies fundamentals and believe the stock is undervalued. It really isn't gambling.
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That’s the rub. Determining whether it’s undervalued or not, based on a yesterday‘s quarterly report and what you think the future might hold for the company. It’s still going to be a guess, albeit a more educated guess. I stare at charts a lot, that’s not actually an investment strategy, but it gives me a feel for what the stock might do. There are never any guarantees.

The question is, does Netflix have potential to bounce up from its lows in the near term and in the longer-term, and also, is it done cratering?

One thing to look at, is to do historical perspective on stocks that have dropped this percentage after an earnings cycle and compare. May be a basket of about 20 or 30 stocks and see if you can decipher any trends.

Even better, would be to find stocks that did this, that were in that same space as Netflix. Find some comparators.

I’d be willing to guess that at least sometime within the next week, Netflix will bounce several percentage points in one day. The question is when.
 
OriginalCanesCanesCanes said:
That’s the rub. Determining whether it’s undervalued or not, based on a yesterday‘s quarterly report and what you think the future might hold for the company. It’s still going to be a guess, albeit a more educated guess. I stare at charts a lot, that’s not actually an investment strategy, but it gives me a feel for what the stock might do. There are never any guarantees.

The question is, does Netflix have potential to bounce up from its lows in the near term and in the longer-term, and also, is it done cratering?

One thing to look at, is to do historical perspective on stocks that have dropped this percentage after an earnings cycle and compare. May be a basket of about 20 or 30 stocks and see if you can decipher any trends.

Even better, would be to find stocks that did this, that were in that same space as Netflix. Find some comparators.

I’d be willing to guess that at least sometime within the next week, Netflix will bounce several percentage points in one day. The question is when.
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Nothing wrong with staring at charts. A lot of guys make their entire living purely based off technical analysis. I am not a TA guy myself, but I do know a thing or 2 about it and and this is a traditional gap fill scenario.

Statistically speaking when stocks crater like this in the AH or premarket, they start to trend back up, before continuing to go back down. So I am sure a lot of TA guys are looking hard at NFLX right now to see if there are other indicators that are screaming buy or stay away.

So I would 100% agree with your assessment, hard to catch a falling knife, but statistically speaking NFLX will most likely end up having a nice run up shortly.
 
OriginalGatorHater said:
Everyone is just glossing over the fact that they actually had 500k more subscribers, but they also lost 700k subscribers from Russia because they suspended service over there. Netflix has done a lot wrong(as has been discussed here-content, botched anti piracy rules, etc.), but none of that was the main reason behind this huge drop.
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They had previously said they expected to add 2.5 million new subscribers. even taking the 700k Russians out, that's only 20% of their expectation.
 
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JD08 said:
They had previously said they expected to add 2.5 million new subscribers. even taking the 700k Russians out, that's only 20% of their expectation.
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Companies miss or beat their estimates all the time, it is very rare for a company to tank like this for missing an estimate. If they missed their estimate and still came out with 500k more subscribers, this snowball effect of the stock tanking most likely wouldn't have even happened.

The majority of that tanking most likely was from institutions and big fish to begin with. Most small fish retail traders don't trade in the after hours.
 
My guess is that over the next 5 years Netflix will be acquired by another platform or studio. It’s the youngest and a stand alone, so it’s the odd man out when compared to Hulu w/Disney or Amazon w/a massive services company as the breadwinner. It’s not established as a producer like HBO, either.

Netflix knew this was coming, which is why they’ve invested so much in creating their own brands and licensing established IPs already. They needed a big number of projects to stand on their own and establish themselves as a studio apart from everyone else, because once streaming became the new normal all the legacy studios started keeping their own (or at least best) content. Netflix knew this and tried to adapt, but it’s almost impossible to pivot from zero native content to a full fledged studio. Even having big hits like Stranger Things and Bridgerton don’t do enough fast enough to cement the company long term. You need like 20 of those every year to keep up with Disney’s absurd backlog, and you need it in perpetuity. Meanwhile Amazon can literally light money on fire for 20 years and still be standing because Prime is a minuscule subset of their revenue (if it even makes them a dime at this point).

Netflix either needs to scale down dramatically and become rich and niche (in which case they’ll be bought) or merge/be acquired by someone else who has that catalogue already. The “get woke go broke” argument may be a supplementary cause of their decline, it’s certainly hastened the downfall of other media companies, but this outcome was already baked in the cake.

A similar thing will hit game studios who don’t have any native IPs, but make content for dozens of games for other studios. A global recession hits and suddenly they are cost prohibitive, their labor gets resourced to cheaper markets, and because they don’t actually make a product of their own they lose most of their clients. Netflix saw this coming and couldn’t course correct before they hit the iceberg.
 
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OriginalGatorHater said:
Companies miss or beat their estimates all the time, it is very rare for a company to tank like this for missing an estimate. If they missed their estimate and still came out with 500k more subscribers, this snowball effect of the stock tanking most likely wouldn't have even happened.

The majority of that tanking most likely was from institutions and big fish to begin with. Most small fish retail traders don't trade in the after hours.
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Yes, but just saying they lost 200k subscribers lacks context the same way not mentioning the Russians or estimate does.

I see people crediting Musk's tweet for the drop in price, but I don't buy that at all.
 
JD08 said:
Yes, but just saying they lost 200k subscribers lacks context the same way not mentioning the Russians or estimate does.

I see people crediting Musk's tweet for the drop in price, but I don't buy that at all.
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Musks tweet happened at 10pm last night(unless I am looking at the wrong tweet), which was after the stock tanked. So his tweet was certainly not the cause of most of the tanking. Of course a lot of retail traders sold this morning after seeing Musks tweet, but that is a very small minority.

How often do you see companies miss estimates and see the stock tank like this versus how often do you see companies miss estimates and only see a small dip in price?
 
Their original content is complete dog **** outside a handful of shows/movies which everyone's already watched. 5 years ago I could spend all day watching great stuff on there, but now my eyes glaze over scrolling through the home page trying to find anything worth watching.
 
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OriginalGatorHater said:
Musks tweet happened at 10pm last night(unless I am looking at the wrong tweet), which was after the stock tanked. So his tweet was certainly not the cause of most of the tanking. Of course a lot of retail traders sold this morning after seeing Musks tweet, but that is a very small minority.

How often do you see companies miss estimates and see the stock tank like this versus how often do you see companies miss estimates and only see a small dip in price?
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Not to mention we're talking about a tiny fraction of their total subscribers. Then number they lost is barely rounding error.
 
JD08 said:
Not to mention we're talking about a tiny fraction of their total subscribers. Then number they lost is barely rounding error.
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It doesn't matter how miniscule it is. Its the first time in over ten years they lost subscribers. That is a big deal.
 
JD08 said:
But as you point out, they didn't really lose any.
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It doesn't make a difference why they lost the subscribers. What matters is the headline is going to say "Netflix loses subscribers for the first time in 10+ years" and people are going to bail out. No one in this thread even pointed out the Russian thing. If you think your average trader does more research on this, than your average CIS forum reader. You are sadly mistaken. Most of the people that own NFLX stock have no idea about the reason for the loss. All they know is they lost subscribers for the first time in ten years.
 
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