Yesterday Netflix reported a quarter which missed EPS, and provided a guidance that was essentially below the street. Yet for some reason the stock shot up 10% on what was perceived to be a dramatic pick up in subscribers and a very low Subscriber Acquisition Cost. We wonder if all those computers who bid up the stock with impunity, lifting all offers on the way up, were aware that in fact the subscriber metrics were a major disappointment. To wit from Bank of America: "without a dramatic lift in free subs as percent of total (from 2.8% in 2Q and 2.5% in 3Q09 to 6.3% in 4Q), Netflix would not have met Street expectations, and paying subscribers of 15.9mn (still up an impressive 46% y/y) missed our estimate by 275K." Yes, ladies and gents, it is the AOL scam all over again. Free subs are subs, the CEO will tell you, and it is all a matter of converting them. Ah yes. That worked out very well for the clusterfuck that is the dial up company. In other words, NFLX results were in reality a disaster across every vertical, and once Q4 is in the books and the inability to fool the vacuum tubes that free subs will become paying subs is realized, this overbloated bubble is in for a dramatic reacquaintance with gravity.