Thursday Humor (And Tragedy For Shorts) - Netflix

Tyler Durden's picture

Spot the NFLX earnings day

 

 

It appears that Einhorn was indeed right that red (free cash flow) is the new black:

 

And speaking of David Einhorn, here are his ironically prophetic comments from his last investor letter:

On April 15 after the close, Netflix (NFLX) announced its results for the first quarter and conducted a conference call. NFLX shares had already risen 39% in 2015 and were trading at more than 100x 2016 estimates with analysts expecting adjusted earnings for the quarter of $0.63. NFLX achieved just $0.36. Prior to the call, the June quarter consensus stood at $0.86; by the next morning consensus was $0.30. All told, analysts slashed estimates for the next three years. Further, we had just finished watching season three of NFLX’s leading original content show, House of Cards, which appeared to be scripted to compete with Ambien.

 

If you’d told us the news in advance, we’d have guessed it was going to be a bad day for NFLX holders, but apparently Red Ink is the New Black. The shares opened the next morning 12% higher and never looked back. By the end of the quarter, the shares had almost doubled for the year, making NFLX the best performing stock in the S&P 500 by far.

 

Why did the stock react that way?

 

Cynically: if it soared on bad news, imagine what it would do with good news.

 

Practically: NFLX changed its story and pushed its promises into the distant future, with grand hopes for the decade starting in 2020. It transitioned from being a company judged by how much it earns into a company judged by how much it spends. Whether the spending proves successful won’t be known during the investment horizon of most NFLX shareholders.

*  *  *

We leave it to Einhorn to conclude the entire market...

the best performing stocks are companies with exciting stories where accountability is in the distant future.

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Soul Glow's picture

Shit just print moar monies and everything will be fine.

:)

Bloppy's picture

CNBC: screaming buy!!!!!

 

pods's picture

I think one of those charts are upside down.

Or is NFLX's business model to actually burn cash?

pods

Waylon Bits's picture
Waylon Bits (not verified) pods Jul 16, 2015 2:58 PM

There's been a division between the crypto community and the stacker community.  Old Hank wouldn't want it this way...

 

https://btc-e.com

Texas Ginslinger's picture

Hey y'all, I can't see the charts through the endless popup ads.

Anyone else having this problem?

mvsjcl's picture

If your stock does well in this bizarro environment, then your company is in the "inner circle." That stock, and all the players in that company, are "in the know." Ownership at this point is monolithic. There is only one owner. The name can't be mentioned. No, it's not Voldemort. Mort. Death to all we hold dear. Rot. Like the blood that seeps from us into a cavity that grows ever larger. It will swallow us unless we move.

UncleChopChop's picture

i actually wonder if the 'inner circle' relates more to big brother support for those companies that are integral to keeping the masses hypnotically docile. keep watching your cheap netflix ($8 a month? anyone can afford it and stay glued to their screens). keep smoking your increasingly legal marijuana. and keep buying cheap 'stuff' on amazon such that you don't have to ever leave your house and question just what in the heck is really going on in the world.

Bitcoin Meiser's picture

CNBC's non-stop ass-kissing of Netflix was too hard to watch today. Switch to Bloomberg TV.

Waylon Bits's picture
Waylon Bits (not verified) Bitcoin Meiser Jul 16, 2015 2:59 PM

CNBC to Bloomberg... frying pan and into the fryer.

Rainman's picture

Just goes to show this pig is the presidential suite in the hedge fund hotel.

seek's picture

I think it's "create more electronic monies" now.

Mildly off topic rant:

After my experience at the bank today money definitely is outside the realm of printing. The war on cash is getting pretty real, had an account with the same bank for > 20 years, and I've pulled $2,500 every couple months out since forever since I pay cash everywhere/always except for online stuff. Today they not only asked for ID, they recorded it as well.

Both this bank and my backup bank have shut down my debit/credit cards in the past month due to not likeing the spending pattern (the backup bank was specific, I bought ammo online and paid for a dating site subscription -- both things on the Choke Point list -- and that was enough to pull them to plug on the card for three days.)

Given how tight they're being on the leash with my own freakin' money, the big one can't be that far away now.

 

Moe Howard's picture

I bought two rifles and 5000 rounds of ammunition and the credit card company was going crazy. Now I know why.

Consuelo's picture

Not your location of course seek, but are you at liberty to disclose who these banks are...?

 

 

seek's picture

I won't name the backup bank because it's a small local bank that'd be too identifying, but the cash thing happened with BMO.

I've been intentionally diversifying to local banks and CUs since the 2008 event, but they all seem to be having similar issues.

I was with a smaller bank that BMO acquired a few years ago, but I've banked same branch and account for literally a couple decades. They cleared out staff that had been there for 10+ years in the past year and most of the new employees look like they belong at Best Buy. I'll get ID requests for wire transfers and large transactions, but this is the first time it's happened for such a small amount. I'm presuming a STR got issued from today based on how it was handled.

TheLooza's picture

why cant everyone agree that everything is just so fucking awesome.....then we all make money.

 

goddammit.  I miss when there used to be red days.

 

 

disabledvet's picture

EINHORN AND FINKLE...

FINKLE AND EINHORN!

EINHORN and FINKLE...

FINKLE/EINHORN...

Dr. Engali's picture

Didn't you hear? Netflix is worth a zillion trillion dollars. Can't find a decent fucking Godzilla movie on it, but it's still worth a zillion trillion dollars.

DetectiveStern's picture

They just added Margin Call which is rather apt.

Barney08's picture

They also have Dazed and Confused

BTFD!

Baa baa's picture

Where do they have them???

CheapBastard's picture

Tough choice whether to invest in those $2 million cheese samich trucks or non-stop C-R-A-P movies from NFLX.

 

All the companies that actually manufactue or produce something are in the toilet.

Ward cleaver's picture

You have to get them mailed to you cause their streaming product sux. BTW I know einhorn has a huge short position but I remember his fight with Lehman . "Yes I'm short but how does that matter when discussing your numbers"?

KnuckleDragger-X's picture

Profit is sooo last millennium, too bad I didn't get the required lobotomy so I could keep playing the market......

ebworthen's picture

What?  Well, they'd better contact TOHO immediately!

Bet they have both Gordon Gekko movies, eh?

Reed Hastings said it was overpriced 40% ago.

That must be the other "buy" signal.

Perimetr's picture

"the best performing stocks are companies with exciting stories where accountability is in the distant future"

 

Remind you of Washington?

khakuda's picture

Yup.  Ya think ZIRP causes speculation?  This is like the late 90s market on steroids.

Spitzer's picture

Just like when Target decided to close their operations in Canada after pissing away billions for 2 years. The stock went up.

Bitcoin Meiser's picture

The problem is that average citizens are investing in the stock market now more than ever without having the the appreciation of knowledge of fundamentals. This is no different than the "casino" Chinese stock market.

Realname's picture

Fundamentals? What are those? I think endless QE destroyed any hopes of fundamentals. As long as the market goes up, its a good buy; when the market goes down, its a really good buy...or so says CNBS.

Bitcoin Meiser's picture

True, bro. I'm waiting for The Big Correction before I get into any of these stocks. And it's coming. Then we can get back to the fundamentals.

I know plenty of people with money who have no idea how to handle it. And they watch CNBC for advice. They come out thinking they are market wizards after watching Jiim Cramer, and they put their money into a "hot stock" right at it's peak. CNBC ropes in the suckers for a pump-and-dump.

They do have good reality TV shows though. The Profit and Shark Tank are inspirational, but it shows that CNBC is only concerned with domestic economic growth; it is a channel that feeds propaganda to The American People, promoting The American Dream, a dream that cannot be promised and should not be gambled on. CNBC has eternal optimism, but not realistic optimism.

Model T's picture
Model T (not verified) Bitcoin Meiser Jul 16, 2015 3:03 PM

The Reason they call it The American Dream; is that you have to be asleep to believe it. ---George Carlin--- RIP. Well, I"mm down 2400$ and change on my S&P500 shorts; but I'm not worried; the muppets will panic again soon.

WTFUD's picture

You can't put a price on Entertainment. s/c

shovelhead's picture

Netflix- The New Amazon.

Barney08's picture

Profits?....we don't need no stinking profits.... BTFD!

yogibear's picture

A trait of this bull mkt.

yogibear's picture

Another pile-on stock. Just don't be the last one to jump off.

TheRideNeverEnds's picture

In the new normal the best way to make money is sell anything tangible (oil, gas, gold, silver ect) buy andything that is a speculative FIAT instrument. The worse it's fundamentals and the higher it's short interest the larger your gains will be as the market continues to rise exponentially and every short loses every dollar they have from now till the end of time.

For those more risk averse just buy Apple, it is going to at least double again from current levels in the next couple years.

Keltner Channel Surf's picture

Olivia Newton-John initiates coverage of Netflix, Inc. with a Buy-Stop    (from “Please, Mr. Please”)

In the corner of the bar there stands a Bloomberg
With the best of technology, old and new
You can pull up five full stock quotes for a quarter
And even some Reuters news when you are through

They’ve got cheap Slovenian bourbon on the counter
“Fast Money” and my friends here to ease the pain
'Til some biotech-pushin’ dork reviews his “Top Picks” 
And here I am just dissing you again

Please, NFLX, please -- don’t hit $117
It was his stop, now it’s my stop, ‘cause it’s over
Please, NFLX, please, if you know what I mean
I don’t ever want to see that price again

If I had a buck for every time I saw you
Smash to new highs after subscribers grow
I could swear I'd be the richest girl in Brecksville
Maybe even in the state of Ohio

But I guess I'd better get myself together
'Cause since he left, my investments lag behind
All that’s left is a note sayin’ “Fade QQQs", and his picture
And that short that's still weighin’ heavy on my mind

Please, NFLX please, don’t . . .

Ceomegaglobalcorp's picture
Ceomegaglobalcorp (not verified) Jul 16, 2015 3:03 PM

I first heard about this place in a Daily Bell article and have lurked here since at least 2010, but just joined a week ago. I've told everyone I can about this place, and mentioned it a zillion times in comments on the 'net, and I know the number of site visitors is exploding, but the thing that's starting to get frustrating about this place is it often seems like little more than a protracted, breathless countdown to slavery.

Stop playing the game, ZH! Everyday you publish a million articles that make it clear that there is no point in reporting the daily stock numbers or the indices' closes, yet you keep discussing equity market performance like something different may happen! There. Will. Never. Be. A. Crash. Come on, you guys are the finance professionals, I'm self taught in all of this (the impetus was my anger at the bailouts), and even I could see three years ago when stocks kept going up for no good reason and they were doing these tests shutting down exchanges that everything was in place for the stock market to go priapism. Human nature in conjunction with those capabilities made that obvious!

There will be a crash only when they want that, ZH, and until that day, lead the way in protest and resistance and stop just reacting by ceasing all coverage of US and Eurozone stock markets. It was obvious to me 3 years ago that if a (unintended) major selloff began, they would simply shut down the exchanges and ban the sale of stocks. Okay, China did it first, but we all know that's what will happen here as well. So give them what they want, ZH, and treat equity markets as meaningless and cease all reporting on them! Why would you let your adversary pick what metric is most important, when you of all people know it is, in fact, meaningless? THEY declared that the game is stock market, and surprise, surprise, they never lose.

Hey ZH, why don't you get back in front by rejecting the notion that stock market is indeed the game? You know it's not a market, so act like it. Stop reporting on it.

Ceomegaglobalcorp's picture
Ceomegaglobalcorp (not verified) Jul 16, 2015 3:03 PM

I first heard about this place in a Daily Bell article and have lurked here since at least 2010, but just joined a week ago. I've told everyone I can about this place, and mentioned it a zillion times in comments on the 'net, and I know the number of site visitors is exploding, but the thing that's starting to get frustrating about this place is it often seems like little more than a protracted, breathless countdown to slavery.

Stop playing the game, ZH! Everyday you publish a million articles that make it clear that there is no point in reporting the daily stock numbers or the indices' closes, yet you keep discussing equity market performance like something different may happen! There. Will. Never. Be. A. Crash. Come on, you guys are the finance professionals, I'm self taught in all of this (the impetus was my anger at the bailouts), and even I could see three years ago when stocks kept going up for no good reason and they were doing these tests shutting down exchanges that everything was in place for the stock market to go priapism. Human nature in conjunction with those capabilities made that obvious!

There will be a crash only when they want that, ZH, and until that day, lead the way in protest and resistance and stop just reacting by ceasing all coverage of US and Eurozone stock markets. It was obvious to me 3 years ago that if a (unintended) major selloff began, they would simply shut down the exchanges and ban the sale of stocks. Okay, China did it first, but we all know that's what will happen here as well. So give them what they want, ZH, and treat equity markets as meaningless and cease all reporting on them! Why would you let your adversary pick what metric is most important, when you of all people know it is, in fact, meaningless? THEY declared that the game is stock market, and surprise, surprise, they never lose.

Hey ZH, why don't you get back in front by rejecting the notion that stock market is indeed the game? You know it's not a market, so act like it. Stop reporting on it.

Comte d'herblay's picture

heh....."Fun-da-MENTALS.

You have to been a true mental case for the last 7 years to follow and use traditional metrics in the following: 1)markets, 2) Gender, 3) marriage.

The Optimists are the true winners.  Pessimists, short people, and FED naysayers look like "IT", Clowns.

 

http://wac.450f.edgecastcdn.net/80450F/screencrush.com/442/files/2013/10...

Bitcoin Meiser's picture

It's time to shake the tree. Shake it hard.

stant's picture

400+ times earnings is cheap!

yogibear's picture

In the DOT COM days 400x  was cheep. Depends how large of a bubble they want to create.

farmboy's picture

Grab the popcorn and watch NFLX. In Europe they lose heavy to a newcomer named "popcorn"

starman's picture

Didn't know Ntflix was a government subsidiary like tesla?

Ahm ahm.

Moe Howard's picture

Got to keep the sheeple distracted, fuck the cost.

RealistDuJour's picture

Complaining when companies hoard cash and don't reinvest in their growth.  Complaining when companies spend cash to invest in their growth.  This blog gets you coming, and it gets you when you're going, lol.

Ward cleaver's picture

Gotta keep the sheeple happy while the government steals away your civil liberties. Thank God the govies r closing down mom and pop bakeries for not baking lezbo cakes. I feel so much better at night knowing I can sleep easy with these people on the job. Great movie, "Lives of Others".

armageddon addahere's picture

Where do you get this ' free cash flow'? I have to work like hell for mine.