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Netflix Plunges On Revenue Miss, Ugly Guidance, Deteriorating Fundamentals

Tyler Durden's picture


At last check Netflix' stock was down about 10% following an earnings report that was about as ugly as they get. While the company beat Q2EPS consensus of $1.12, coming with a number of $1.26, it missed revenue estimates of $790.5 MM at $789 MM. What's worse, it forecasted Q3 EPS of $0.72-$1.07, far below the $1.23 consensus, while it sees revenues of $780-$805 MM on consensus of $842 MM. And digging deeper, the rot was pervasive in virtually every line item. But don't worry: according to NFLX, it is now bearing the Pirate Bay scourge. Not. But at least Jim Cramer loves it.

Other ugliness:

  • The company anticipates its current Qtr end subscribers of 24.6 million (up from 22.8 million) to barely grow to a range of 24.6 to 25.4 million
  • Gross profit declined to 37.9% from 39.0% sequentially, and from 39.4% Q/Q
  • The domestic subscriber acquisition cost jumped from $14.38 to $15.09
  • Average monthly revenue per subscriber dropped to $11.49 - the lowest in the past 3 years, and certainly the lowest under the current business model
  • The company had 1.3 million free domestic subscribers, and 110K foreign subs
  • Of the company's $86 million in cash from operations, $40 million came from working capital: a traditional "source" of cash for the company
  • Take away this traditional, but non-recurring working capital fudge and instead of adding $25 million in cash, the company would have burned through $15 million in cash in Q2.

And much more in the linked excel file. The company's full presentation can be found here, which has one notable item: the company is actually boasting that it is beating Bit Torrent piracy:

Netflix beating Bit Torrent piracy


In May, analysts at Sandvine published a report on global broadband trends suggesting that people are watching and downloading more video over the Internet than ever before. Given the popularity of our streaming service and the growth we’ve experienced in streaming subscribers and hours viewed, we were not surprised by this finding. What did pleasantly surprise us was how we compared to other providers of Internet video. Our low cost, high quality, on demand streaming service has become so good that the largest percentage of the Internet’s traffic is for paid content instead of illegal free peer-to-peer sites like Bit Torrent. Over coming quarters we’ll see if we can recreate this “beat piracy” feat outside of North America.

Translation: Pirate Bay is starting to eat Netflix' lunch. Yet another translation: time to IPO Piratebay and pair trade by hedging with NFLX.

As for those expecting an immediate boost to earning courtesy of the recent price spike in services, dont hold your breath:

We didn’t change the pricing for our streaming only subscribers, and those members will get to enjoy more and better streaming content going forward. Subscribers who only want DVDs from us are happy with the introduction of DVD only plans, because they can pay $7.99 instead of $9.99, a 20% savings. It is expected and unfortunate that our DVD subscribers who also use streaming don’t like our price change, which can be as much as a 60% increase for them from $9.99 to $15.98, when it goes into effect for each subscriber upon their renewal date in September.


Some subscribers will cancel Netflix or downgrade their Netflix plans. We expect most to stay with us because each of our $7.99 plans is an incredible value. We hate making our subscribers upset with us, but we feel like we provide a fantastic service and we’re working hard to further improve the quality and range of our streaming content in Q4 and beyond.


In Q3 we will see only the negative impact of the pricing change, given that the announcement was early in the quarter and that the increases won’t take effect until late in the quarter (September 15th on average). We expect domestic net additions in Q3 to be lower than the previous year Q3, and because of the timing of the price change, revenues will only grow slightly on a sequential basis.

Net result: the chart below.

And updated:

At least Reed Hasting's weekly automated 5,000 shares dump plan is helping restore much needed confidence in the long-term prospects. Oh wait...

And another way to see it:


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Mon, 07/25/2011 - 16:40 | 1492002 ihedgemyhedges
ihedgemyhedges's picture

Oh Robo, where art thou Robo?

Mon, 07/25/2011 - 16:51 | 1492051 JohnG
JohnG's picture


Mon, 07/25/2011 - 16:54 | 1492062 the mad hatter
the mad hatter's picture

Tyler, you forgot about competition from Amazon's VOD for Prime subscribers

Mon, 07/25/2011 - 16:57 | 1492071 Sudden Debt
Sudden Debt's picture


     ....dried bush rolling by in the wind...

while the standoff song of "the good, the bad and the ugly" plays...

Mon, 07/25/2011 - 20:17 | 1492549 msamour
msamour's picture

That would be tumble weed my friend if you want your statement to have the impact you were hoping for. There fixed it for ya. ;)

Tue, 07/26/2011 - 02:05 | 1493614 StychoKiller
StychoKiller's picture

"Easy as cake!"  Darn bloody fureigners, don't know englich very well!

Mon, 07/25/2011 - 18:58 | 1492336 Freddie
Freddie's picture

Pirate Bay IPO - bitchez!

Mon, 07/25/2011 - 16:40 | 1492003 jkruffin
jkruffin's picture

The price increases they imposed are going to kill their growth and retention numbers.  They just signed their own death warrant.

Mon, 07/25/2011 - 17:04 | 1492091 RacerX
RacerX's picture

That's what I think. I cancelled the online svc entirely after receiving the price increase notice.

Greedy f-ers.

Mon, 07/25/2011 - 18:57 | 1492332 Rainman
Rainman's picture

Ah yes, commoners must express their revulsion through any and all means. Cinema is mostly shit now, anyway.

Mon, 07/25/2011 - 19:00 | 1492346 Freddie
Freddie's picture


99% of movies are total shit.  The only thing interesting is next summer's Promethus or Ridley Scott's Alien preequel (roughly). 

He wanted a budget big enough to bail out Greece or at least most of Ireland.

Tue, 07/26/2011 - 04:12 | 1493714 foofoojin
foofoojin's picture

And reduce the bandwith and infrastucture cost. In a weird way this is how they slow the rate of growth till the networks in the world improve.

Mon, 07/25/2011 - 16:40 | 1492005 TruthInSunshine
TruthInSunshine's picture

This is a RoboFader "convict(ion) buy", so BTFD, bitchez!

Mon, 07/25/2011 - 16:41 | 1492008 Tense INDIAN
Tense INDIAN's picture

Tomorrow is RATE HIKE DAY ......just took a look at BANK NIFTY index...and the VIX...::

Mon, 07/25/2011 - 16:43 | 1492010 b-rad-is-rad
b-rad-is-rad's picture

Covered my shorts at 257. Easy money.

Mon, 07/25/2011 - 16:42 | 1492011 jkruffin
jkruffin's picture

Who needs Netflix anyway? You can get any movie or TV show you want for free these days, commercial free. We don't even need Sirius radio anymore.

Mon, 07/25/2011 - 16:53 | 1492054 Long-John-Silver
Long-John-Silver's picture

We don't even need Sirius radio anymore

That's a BS statement. Try telling a truck driver he doesn’t need his XM/Sirius radio anymore.

Mon, 07/25/2011 - 19:06 | 1492355 Freddie
Freddie's picture

Just like taking a trucker's meth away.

Mon, 07/25/2011 - 18:48 | 1492319 Hansel
Hansel's picture

I kinda like the streaming service.  $8 a month is much cheaper than cable.  I've watched a bunch of foreign films I never would have known existed, e.g. Ip Man, The Man From Nowhere.  Some older movies are good too.  Less hassle than pirating, IMO.

Mon, 07/25/2011 - 18:59 | 1492340 MacchuPicchu
MacchuPicchu's picture


If I actually paid for my Time Warner cable subscription I would have cancelled it a long time ago in favor of Netflix, which is still an outstanding value. People need to calm down and stop ranting about 'greedy f-ckers'. Eight bucks for unlimited streaming is pretty sweet even if their catalog is not quite all-encompassing. 

Mon, 07/25/2011 - 19:49 | 1492479 Abitdodgie
Abitdodgie's picture

It is not exactly watch on demand , have you ever done a serch for a movie title and you can NEVER watch it you have to add to list, you have to put a same type film in and hope it pulls up the film you were really looking for so you can watch it instantly. Why does spell check never work I am dislecsic.  


Mon, 07/25/2011 - 16:43 | 1492014 Seasmoke
Seasmoke's picture


Mon, 07/25/2011 - 16:43 | 1492016 Eagle Keeper
Eagle Keeper's picture

Since when do fundamentals matter ???

Mon, 07/25/2011 - 16:47 | 1492030 A Man without Q...
A Man without Qualities's picture

This is why they have been shouting about moving into LatAm, Caribbean and Europe.  For the first two, internet speeds are so slow, it will take a week to download a movie and in most parts of Europe, on demand film is available through numerous sources already.  US equity idiots who buy the likes of Netflix won't understand that data speeds are higher in Europe, and this is a well established market.

As for US, it looks like they've hit peak subscribers, so there's only one way to go from here.. 

Mon, 07/25/2011 - 16:47 | 1492034 Id fight Gandhi
Id fight Gandhi's picture

People don't like paying 60% increases... Who'd a thought?

Safe to say another momo done?

Mon, 07/25/2011 - 19:48 | 1492476 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

My rates are dropping by 20%. If you do not do streaming (which stinks anyways due to internet lag), your rates drop. Go Netflix! As for stock price, it's a dud though.

Mon, 07/25/2011 - 16:50 | 1492037 Archimedes
Archimedes's picture

Netflix IMHO has already peaked. CONtrary to what they say they will lose tens of thousands if not  more than 100,000 subscribers from the cost increase alone.

Also eventually service providers are going to jack up bandwitdh usage rates which will cause the streaming business to suffer. Currently Netflix is making money on the backs of the providers. This will change.

Should be a sub $100 stock by Q2 2012


Mon, 07/25/2011 - 16:50 | 1492049 SheepDog-One
SheepDog-One's picture

Netflix aint all that, Ive had it for 6 months, havent watched a thing on it in the last 3.

Mon, 07/25/2011 - 19:22 | 1492390 knukles
knukles's picture

Holders'll be screwed?

Tue, 07/26/2011 - 02:08 | 1493617 StychoKiller
StychoKiller's picture

'Bout time!  He's the laziest A.G. the US has ever had!

Mon, 07/25/2011 - 16:49 | 1492040 mfoste1
mfoste1's picture


Mon, 07/25/2011 - 16:49 | 1492043 SheepDog-One
SheepDog-One's picture

RoboTrader muttering to himself in the corner, 'My Momo!!'


Mon, 07/25/2011 - 18:15 | 1492261 EvlTheCat
EvlTheCat's picture

One Momo to rule them all,
One Momo to find them,
One Momo to bring them all
and in the darkness bind them.

Mon, 07/25/2011 - 16:50 | 1492046 b-rad-is-rad
b-rad-is-rad's picture

NFLX Streaming service fucking sucks anyways.

Mon, 07/25/2011 - 16:50 | 1492047 RobotTrader
RobotTrader's picture

No worries, BIDU up 7%, new world record highs.

BRCM up 8%.

That will be enough to sell the phony story about the oft-mentioned "V-Shaped 2nd Half Recovery".....


Mon, 07/25/2011 - 16:53 | 1492052 SheepDog-One
SheepDog-One's picture

OH theres another momo to jump on the bandwagon and hype! Yipee! You really are something as a rear-view mirror trader Momo.

Mon, 07/25/2011 - 16:55 | 1492065 fuu
fuu's picture

junk bitches

Mon, 07/25/2011 - 17:02 | 1492086 Sudden Debt
Sudden Debt's picture

You should apply for a job at CNBC...

Mon, 07/25/2011 - 17:53 | 1492211 ElvisDog
ElvisDog's picture

Oh, come on, Sheepdog, Robo is just messing with you.

Mon, 07/25/2011 - 16:50 | 1492048 caerus
caerus's picture

suck it reed hastings

Mon, 07/25/2011 - 16:52 | 1492055 dracos_ghost
dracos_ghost's picture

Fundamentals? Stop making words up Tyler, we all know there is no such thing.

Green Light, Red Light. That's all you need to know about investing nowadays.

Mon, 07/25/2011 - 16:55 | 1492057 virgilcaine
virgilcaine's picture

The darlings of the Old Bull (bear Mkt rally of 09-11) dropping like flies.

Mon, 07/25/2011 - 16:54 | 1492058 fuu
fuu's picture

People still pay for entertainment?

Mon, 07/25/2011 - 17:05 | 1492096 Sudden Debt
Sudden Debt's picture

The kids like it.


When I was young, all we needed was 5 gallons of fuel, a lighter and we could entertain ourself for the entire day.

Kids... they lost the sense of fun...

Mon, 07/25/2011 - 17:14 | 1492124 blunderdog
blunderdog's picture

Dude, 5 gallons of fuel these days costs more than a case of beer.

Mon, 07/25/2011 - 17:29 | 1492165 malikai
malikai's picture

These days, a few bottles of robitussin or glade seems a better deal.

Tue, 07/26/2011 - 01:47 | 1493595 Fish Gone Bad
Fish Gone Bad's picture

I've seen people buy 10 cans of Glade type air freshener at a time.  I figured they were either cleaning a kennel, going to a bean eating contest, or huffing it.  For those interested, the local 99 cents only stores usually have a great deal of it.  People can wash away the bad taste with quarts of 40 proof mouthwash for $1, or for the die hards, 8 ounce bottles of hand sanitzer (95% ethanol) for a buck.

Mon, 07/25/2011 - 17:34 | 1492177 Long-John-Silver
Long-John-Silver's picture

5 gallons of gasoline only cost's 5 junk (90%) Silver dimes.

Mon, 07/25/2011 - 17:26 | 1492153 fuu
fuu's picture

You meant liters right?

Mon, 07/25/2011 - 19:19 | 1492380 knukles
knukles's picture

Talk about old times and warm fellings.
We used to burn shit all day left and right, vegitable, animal and mineral.  Actually to be more precise, the animal part was a kid dwon the street who we all hated.  But we didn't hurt him.  Well, physically.  Might have scarred his soul for the day.  A little traumatized, but he made it.  Kinda.
Or cans of lighter fluid squirt the shit like a flame thrower.
SD, you're a bloody genius.  Now I have something to relate to my small nephews and neices over dinner tonight. 
Y'all come on back now, ya' hear! 

Mon, 07/25/2011 - 16:54 | 1492060 JohnG
JohnG's picture

Sunpower......Leo?  Leo??


Mon, 07/25/2011 - 17:10 | 1492112 Sudden Debt
Sudden Debt's picture

Last weekend a sales rep who sold solar panels rang my door.

150 euro per panel, buy and install 10 and you could get the inverter for free.

The man must have been blind because I've already have 14 panels on my roof.

But that's what the solar business has become. Cold prospecting and crazy discount prices. I paid 4 times as much 3 years ago.

And the type of salesman... I though it was a gardner looking for a job...

In 2 years, they'll be giving solar panels for free with every box of crispy's you buy.


Mon, 07/25/2011 - 18:22 | 1492274 vocational tainee
vocational tainee's picture

Hey ,SD you must live in a funny country...

Mon, 07/25/2011 - 18:57 | 1492333 Freddie
Freddie's picture

Sounds like Callieepornia but it is Belgium.   What kind on solar power can you get in Beligium?  Spain is an ideal country and solar required heavy govt subsidies in Espania.  

Mon, 07/25/2011 - 20:26 | 1492574 msamour
msamour's picture

He lives in a country that has no working government, and where half the people hate the other half. I know at least a dozen people whom all left there in the previous year. No wonder they are practically giving stuff away. Pretty soon they will be giving a solar panel away for any French Speaking Belgian to move to France!

Mon, 07/25/2011 - 16:55 | 1492064 shushup
shushup's picture

No wonder they made a global expansion announcement 2 weeks ago. So the indiders could sell a rally and get out before deplorable earnings. Great strategy. So much for Sarbanes Oxley. Bastards!

Mon, 07/25/2011 - 16:55 | 1492066 shushup
shushup's picture

No wonder they made a global expansion announcement 2 weeks ago. So the indiders could sell a rally and get out before deplorable earnings. Great strategy. So much for Sarbanes Oxley. Bastards!

Mon, 07/25/2011 - 16:55 | 1492067 RobotTrader
RobotTrader's picture

I see Obummer is speaking at 9:00pm.

And BIDU now has a $55 billion market cap with only $2 billion in revenues.  Man, the world simply loves these tech stocks, NFLX notwithstanding.

If we get past sept with no damage we could see 1400-1450 this year.  Shorts have been raped worse than any time in history the last 2.5 yrs.

Mon, 07/25/2011 - 16:57 | 1492073 Long-John-Silver
Long-John-Silver's picture

Jim Cramer said this could never happen and go long netflix. That's when I sold all of it.

Mon, 07/25/2011 - 17:04 | 1492095 kito
kito's picture

i thought you were all pms?

Mon, 07/25/2011 - 17:42 | 1492183 Long-John-Silver
Long-John-Silver's picture

I guess I should have said I convinced my wife to sell her netflix, which she did.

It's that old what is mine is her's and what's her's is her's thing.

Mon, 07/25/2011 - 17:11 | 1492115 RollinRavenPurple
RollinRavenPurple's picture

Not true, this morning he said the shorts would slam the bid on every uptick afterhours. 


I'm BTFD, squeeze will come just like it did last qtr. after down $20.  The support is $254 and then $245 and $240 - pick one and then up we go...can't stay short these low float stocks or you will get your head handed to you.  I did and learned my lesson.

Mon, 07/25/2011 - 17:34 | 1492179 slaughterer
slaughterer's picture

Even with this poor guidance, NFLX is only makign a 1-month low.  The covering rally tomorrow will be something to see, and, yes, NFLX is a BTFD if the analysts do not lower their price targets overnight. 

Mon, 07/25/2011 - 18:21 | 1492273 sheeple2012
sheeple2012's picture

sorry, this time is different... NFLX playing games with write-off curves of content deals (that's why CFO bailed) ... sell any rally above 260-265 tmrw

Mon, 07/25/2011 - 17:02 | 1492084 caerus
caerus's picture

but...but...I thought they were expanding into bumblefuck-astan

Mon, 07/25/2011 - 17:04 | 1492089 JOHNICON
JOHNICON's picture

This is a year too late for my poor NFLX naked puts.  :(

Mon, 07/25/2011 - 17:06 | 1492101 Oh regional Indian
Oh regional Indian's picture


Very much OT...Check out the lik below. Awesome representation of US debt. Generally apropos.

Fiat looks so hollow... and Holywood is a propaganda machine, plain, pure and simple. I hope Netflix suffers massive server failure so people get off their asses. NWO tool company.


Mon, 07/25/2011 - 18:13 | 1492250 JohnG
JohnG's picture

Blog pimping troll alert!

Blog pimping troll alert!

Blog pimping troll alert!

Blog pimping troll alert!

Blog pimping troll alert!

Blog pimping troll alert!

Mon, 07/25/2011 - 17:09 | 1492108 TruthInSunshine
TruthInSunshine's picture

1 month ago @ Netflix Corporate HQ:


CEO:   Well, maybe the economy is less feeble than we've been privately hearing about from you know who. Maybe we should raise prices and grab additional revenue.

CFO:   Sounds like a plan. People will pay the higher prices.

CEO:   I mean, what choice do they have? Am I right?

CFO:   I concur.

CEO:   We're like money, brosef.


Mon, 07/25/2011 - 17:10 | 1492113 Crabshack
Crabshack's picture

Great model.  They make up 30% of the internet traffic and pay nothing for it.  

Mon, 07/25/2011 - 17:26 | 1492155 buzzsaw99
buzzsaw99's picture

disingenuous. subscribers pay the internet provider.

Mon, 07/25/2011 - 17:13 | 1492121 HitTheFan
HitTheFan's picture

Tech question....with the new ZH interface is anyone else not seeing updated/new posts unless they sign out, refresh the page, the sign back in again?

Why is technology such a pain in the bernank?

Mon, 07/25/2011 - 17:18 | 1492131 monopoly
monopoly's picture

So, lets say they earn $4.00 for the year. At a PE of oh, lets be generous, 20, that brings them to about 80 bucks fair value. A little bit to go yet.

Mon, 07/25/2011 - 17:19 | 1492135 monopoly
monopoly's picture

Hit, no, just have to refresh and all posts show up.

Mon, 07/25/2011 - 17:24 | 1492146 UGrev
UGrev's picture

RedBox, BlockBuster and AmzonPrime say THANK YOU NETFLIX for charging your customers 60% More.

Mon, 07/25/2011 - 17:31 | 1492166 Zymurguy
Zymurguy's picture

Yeah, they are complete a-holes.

I'm probably going to dump them completely.  Researching alternatives now...

Mon, 07/25/2011 - 17:33 | 1492174 Sandy15
Sandy15's picture

Netflix is down almost $30 after hours and the market futures are flat..............  what is wrong with that action?????

Mon, 07/25/2011 - 17:43 | 1492194 CitizenPete
CitizenPete's picture


Mon, 07/25/2011 - 17:48 | 1492202 mynhair
mynhair's picture

BitTorrent is getting crunched by ISP limits.  So is NFLX.  Comcrap put us on a 250 gig/mo limit with no notice.

Oh, the pain!

Frigging trading chart sucks 100 meg/dy

Mon, 07/25/2011 - 17:56 | 1492217 doomandbloom
doomandbloom's picture

must be that Hitler video that did this...

Mon, 07/25/2011 - 18:02 | 1492228 I Am The Unknow...
I Am The Unknown Comic's picture

What is wrong with all of you negative nancies out there?  CNBC and cramer sez this is a wonderful buying opportunity.  I'm sure Robo agrees, and could probably give us a truncated, outdated chart (overlaid with his new fav, BIDU) to show us how both NFLX and BIDU are GREAT BUYS RIGHT HERE....Yeah Team Oblivious!

After all, what are all of the unemployed going to do except sit around watching NFLX movies???  Oh, wait, I guess the unemployed DO have the time to go get the smae movie for only $1 at Redbox, or simply find it for free online.   Hmmm, who would have thought?  Well, at least AAPL touched $400 (and $400 liked it ;>0)

sarc off - what a bunch of shite on the fundos.  I hope the f*ing stock crashes and burns tomorrow.   

Mon, 07/25/2011 - 18:03 | 1492232 JohnG
JohnG's picture

OT, but here's a guy that SERIOUSLY needs a job:


Mon, 07/25/2011 - 18:14 | 1492257 Caviar Emptor
Caviar Emptor's picture

As Netflix goes, so goes the nation

Mon, 07/25/2011 - 18:17 | 1492264 mynhair
mynhair's picture

Ahso, the turlet.  Well played, grasshopper.

Mon, 07/25/2011 - 18:24 | 1492277 Uncle Remus
Uncle Remus's picture

Netflix definitely screwed the pooch with their price increase and still tepid offerings. In a pinch, I stream Amazon. Haven't watched a physical DVD in months and even longer for the rare Blu-Ray. As someone pointed out upstream, The bandwidth caps are coming! The bandwidth caps are coming! I expect that metered bandwidth will creep into residential connections just as it has mobile data plans.


Mon, 07/25/2011 - 18:25 | 1492279 Akrunner907
Akrunner907's picture

Smells like an elaborate pump and dump.  Netflix is not even worth half its value. 

Mon, 07/25/2011 - 18:26 | 1492280 Cvillian
Cvillian's picture

Yeah the insider sells are Angelo Mozilo 2.0. "He's just diversifying"

Mon, 07/25/2011 - 18:44 | 1492310 Akrunner907
Akrunner907's picture

Yeah,  look at who is exercising options for a $1.50 and selling them for over $280 a share....


Mon, 07/25/2011 - 18:30 | 1492284 TruthInSunshine
TruthInSunshine's picture

The Bernank is preparing to back NFLX @ $290 a share.

He'll print and print to sustain the virtuous circle.

Or not.

This really is an already obsolete business model, or at minimum, obsolete pricing structure, on so many levels.

Mon, 07/25/2011 - 18:53 | 1492325 pleseus
pleseus's picture

Didn't Netflix just raise prices?  Some how me thinks this isn't good for getting more customers.

Mon, 07/25/2011 - 18:53 | 1492326 poor fella
poor fella's picture

Doesn't mean a thing but a buying opportunity until all the 'golden bull zombie' stocks hit the shitter - i.e. salesforce, lulu, ibm, chipotle, nike, open, bidu, SPY (etc. etc.)

Jeeze, forgot aapl! (usually don't think twice nor once about 'em.)

Mon, 07/25/2011 - 19:05 | 1492339 Widowmaker
Widowmaker's picture

Is everyone wearing tight girls panties today?

Who comes to a finance blog to bitch about $7 a month?   Teens and unemployed college students, that's who.

Some of you should vacuum your mommy's basement or something.

The differentiation is physical service (BluRay, etc) vs. streaming. 

The reality is that cable operators have been overcharging their subscribers. The only reason they are antsy is because they have been double-selling on the service end where it is un-noticed by the average user until it's peaked.  NFLX pushes peak network utilization into honesty territory, thus exposing the racket known as the aging ISP ripping off customers for a decade. All you babies didn't even know it.

Time to yell and scream like big baby cable operators.   BOOO HOOOOO Netflix is going to replace us, BOOO HOOOO!

NFLX will be over 300 by the end of the week.

Mon, 07/25/2011 - 20:04 | 1492520 Captain Kurtz
Captain Kurtz's picture

Seriously man, 7 fucking dollars.  7 measely fucking dollars.  Want to know the most ironic part?  Netflix will probably invest a good portion of that into more content (if they want more subs) which is a win for joe six pack.  It's algo good for growth and earnings simultaneously.  Go figure.  Maybe all these whiners work for the cable companies.

Tue, 07/26/2011 - 01:26 | 1493563 Captain Kurtz
Captain Kurtz's picture

got sniped by either someone who works for the cable company, or someone who cant afford $7.  maybe both actually, hahaha

Mon, 07/25/2011 - 20:21 | 1492559 Almost Solvent
Almost Solvent's picture


Time Warner and VZW can kiss my ass!




Hey Time Warner employees - why the fuck can't your stupid ass company get the NFL Network? People will pay EXTRA for it. But no, TWC sucks ass and thinks they are making some point to the NFL. Bullshit </rant>

Mon, 07/25/2011 - 22:19 | 1493042 Abitdodgie
Abitdodgie's picture

Widowmaker is right you get change out of $20 a month , nearly a gallon of gas change , you put that down a panty in 5 min , so please give it up bitchin over  a couple of frn's

Mon, 07/25/2011 - 19:15 | 1492369 Shocker
Shocker's picture

Netflix needs to start streaming new movies. The sames ones you normally get on dvd. Then they wouldn't have to worry about the old cd/dvd anymore.

Mon, 07/25/2011 - 19:26 | 1492407 tmftdoyle
tmftdoyle's picture

last year, management confidently predicted that streaming would make its customers "stickier", therebye reducing churn, which happens to be the biggest hole in the business model. Whoops, churn rising to 4.2% per month, before the price increase hits. More importantly though, churn among the company's paying subscribers actually reach 5% per month during this past quarter. This always has been, remains and always will be a lousy business model. Now that the subscriber growth is flattening out, perhaps the mo-mo monkeys will take a look at the lousy operating model behind the hype.

Mon, 07/25/2011 - 19:37 | 1492440 contrabandista13
contrabandista13's picture

Oh shit...!  I never heard of X-FINITY.....  It's not like they are soaking up the entire planet....  Hey guess what... There's an xfinity commerical on right now...  NFLX is a "buggy whip"... DUH....?????

Mon, 07/25/2011 - 19:37 | 1492442 contrabandista13
contrabandista13's picture

Oh shit...!  I never heard of X-FINITY.....  It's not like they are soaking up the entire planet....  Hey guess what... There's an xfinity commerical on right now...  NFLX is a "buggy whip"... DUH....?????

Mon, 07/25/2011 - 19:37 | 1492443 contrabandista13
contrabandista13's picture

Oh shit...!  I never heard of X-FINITY.....  It's not like they are soaking up the entire planet....  Hey guess what... There's an xfinity commerical on right now...  NFLX is a "buggy whip"... DUH....?????

Mon, 07/25/2011 - 19:37 | 1492444 contrabandista13
contrabandista13's picture

Oh shit...!  I never heard of X-FINITY.....  It's not like they are soaking up the entire planet....  Hey guess what... There's an xfinity commerical on right now...  NFLX is a "buggy whip"... DUH....?????

Mon, 07/25/2011 - 19:38 | 1492447 contrabandista13
contrabandista13's picture

Oh shit...!  I never heard of X-FINITY.....  It's not like they are soaking up the entire planet....  Hey guess what... There's an xfinity commerical on right now...  NFLX is a "buggy whip"... DUH....?????

Mon, 07/25/2011 - 19:58 | 1492505 I am a Man I am...
I am a Man I am Forty's picture

it's fallen all the way back to its price in mid June!

Mon, 07/25/2011 - 19:59 | 1492509 Captain Kurtz
Captain Kurtz's picture

Yea saw this.  Incredible, however i have to say i kinda saw it coming.  What i'm not reading anywhere in regards to the rate hike (Dude its  like $7 WTF??) is how much comparable content costs via other systems, oh like i dont know - fucking cable!??!  Cable can easily run a family $100+ per month.  And yet we complain about what amounts to a little more than that fucking late fee you pay every month.  Netflix is scalable in the household and can run on many devices simultaneously at no extra cost, it has more selection than starz whoch is all your fucking getting for $100, and they're basically asking for more money for more content Bubba.  For god sake why are people so f'ing dumb.  Tempted to BTFD!!!

Mon, 07/25/2011 - 21:06 | 1492672 FischerBlack
FischerBlack's picture

Poor Whitney Tilson.

Mon, 07/25/2011 - 23:56 | 1493377 JohnG
JohnG's picture

test from a kindle my internet died....

Tue, 07/26/2011 - 00:01 | 1493391 JohnG
JohnG's picture

well fuck me it worked

Tue, 07/26/2011 - 08:44 | 1493942 BinAround
BinAround's picture

The chart is a very strong.  And the business?  Paid subs in 1H11 grew by 5.3mln vs 2.6mln last year.  That looks pretty good to me.  You want to bet against an expansion into a new territory by a company that has already proved the concept in USA?  EBITDA margins are constant, not falling.  It looks very expensive, but what will be the revenue growth in two years.  You can't tell, so valuation is highly uncertain.  The balance sheet is solid.  Cashflow from operations near $100mln per quarter with very low capex.  Revenue just grew 52% yoy in 2Q.  All this looks exceptional.  BUT...  Will Walmart, Apple and cablecos be able to reduce NFLX growth, or has NFLX already captured consumer mindshare with first mover advantage (like Amazon?).  Shorting it now seems dangerous.   

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karmete's picture

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