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Netflix Implodes After Reporting Horrific Guidance; Notes It Repuchased Stock At $218 Avg Cost Basis
One hopes that the European surprise on Wednesday will be more successful than this. In the meantime, the XIRR on Jim Cramer's recommendation to buy NFLX on Sept 26 at $135 through the current AH price of $87 is -99.6%.
Earnings summary shows EPS forecast peaking at $0.70 which the street had at $1.10. Explains the epic collapse in the stock after hours.
Some highlights from the letter:
- We expect streaming net addition will be negative in October due to the cancellation wave referred to above
- We used $39.6 million in Q3 to repurchase 182,000 shares at an average cost basis of $218.
- After the repurchases we finished the quarter with $366 million in cash and equivalents
- We expect to report a global consolidated net loss in Q1 2012 as well as to consumer cash as we launch the UK
And here is why we repeat our warning from last year, that Netflix' business model demands a follow on offering:
- We expect our FCF to continue to lag net income for the next few
quarters as our spending on content continues to increase both
domestically and internationally - By pausing on further international expansion and halting buybacks, our current cash on hand is adequate to support the growth of the business. As we have done in the past, we will continue to evaluate the appropriate cash level for the business
Cramer buying at $135 on September 26, 2011
The IRR for anyone who listened to Cramer a month ago: -99.6%
In other news, sub $100 make that $87
Full earnings "investor letter"
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See my prior posts - management were on a highway to hell.
"You people are evil trolls."
I heard Anonymous was shorting it... Anonymous says We are Legion (Luke 8:30) so your statement must be correct.
hihihihihihihi
LULZ!
A reaction to company fundamentals.... SHOCK .....HORROR!
The world as we know it will end tomorrow...................
Cramer = shill, plant or stooge
FTB and asshat Cramer
you might be able to find him telling you to sell, and buy. this guys is really just "The Lemon Drop Kid", a story by Damon Runyon about a racetrack tout who never visited all this customers at the same time. He gave each of them a different horse, and then after the race he would go collect from the winner. Sad to say television (in the hands of the MSM) is a tool which keeps all of us apart, so they can manipulate our answers.
but to finish the thought, Charles Van Doren won the first real game show the 64 thousand dollar question. it was later revealed he was coached, or given the answers. (to which McLuhan laughs some years later, what's the matter with people, this is entertainment - now I present to you the election of 2012 - just remember ducklings, its ALL entertainment)
Racing all the way down, any calls for new normal, maybe back to 2008 @ $30?
Shorts still avail?
And this charlatan is not in jail. He still has a show. What kind of perverts are the programming directors of this idiot channel.
I just cannot believe that. CNBC should be banned in every country except Libya.
http://biz.yahoo.com/t/86/4053.html
Leslie Kilgore chief marketing director NFLX has sold every fucking options grant she has gotten from the beginning And that is starting from years ago. She is one of the only people making money on this roller coaster.Well Reed HAstings too. But WTF
And she markets the shit.
Why you know she's merely diversifying her portfolio.
As for me, I can't get past the idea of issuing guidance for domestic streaming.
Where I'm from, there's just some things that aren't discussed in public.
My initial thought was, no way that XIRR even iterates...alas ZH is correct. -99.6745. Throw Lenny Dykstra in the mix and it just goes to show, you shouldn't take investment advice from entertainers(especially the loud arrogant kind)
Funny how that pricing decision a few weeks ago seems to have been the straw that broke the camel's back. Never screw with your installed base like that.
And now BAC is taking a page from the same playbook and headed in the same direction...maybe even faster. Couldnt happen to a nicer bunch of pricks.
Reed Hastings should be tossed yesterday -- I can't believe he is around.
Epic bungles = college case studies, maybe Hastings can teach at a community college.
Neftlix is one step away from pure poison where even the name won't find a buyer -- hell even blockbuster has that going for them.
Netflix RIP.
And I'm going to go out on a limb here. Netflix was in trouble because they offered something that any company could replicate. Streaming videos - not hard. Sometimes being first to market sucks. That being said, they have done much to alter the television/computer landscape but I don't see them rewarded for it. And that's life. Oh Robo!
Actually, doing it legally in the USA has always been the problem - licenses cost money - you might remember the entire "Blockbusters get new releases a month before competitors". That cost them serious money . Not to mention the GUI / user reviews / user picks angles, and the algo that matched your 'picks' to other users 'picks' to accurately recommended films you'd enjoy1 and lastly the bandwidth compression / queuing.
There was some fairly clever math under the hood. Then stupid management took over. Dum-Dum-Durr.
The bandwith issues - not my area of experitse but I know some very smart people who have worked on compression.
Licenses - was it really that hard? I don't recall the Blockbusters issue. But again not my area.
The recommendation algorithms - I've worked in this area - mmm - not that hard to delvelop a marketable product. Much harder to get it perfect ;) But I have also worked with some managers that .... well I would have done it differently.
Given your expertise, you probably know more than me about the entire industry. Math isn't something I'm talented at & I code like a monkey.
I was under the impression that what set Netflix apart was the 'crowdsourced' nature of the algo; user reviews / picks added to the sophistication of the project. i.e. Every time your happy users reviewed / recommended a film the entire user base got a 'better' delivery of recommendation. Users like that reciprocal feeling of adding value to a service they're paying for. Which they then flushed down the pan. I'd look at Wallmart still looking to get into the market as an indicator of the problem - there's internet streaming sites [Hulu / BBC Iplayer etc on the successful legal end, although those are subs. of physical stations] and of course a million torrents / illegal streaming sites. Monetisation was always the key, and they managed to do it entirely the wrong way (however logical it is that a physical delivery cost more than a digital stream).
I merely look at the way they played their hand, and the psychological reaction of the user base. 800k canceled subscriptions says it all (although, could be also seen as an indicator for the general economy - lower economic tiers will use netflix more than people who can afford a night out).
shades of the Bear Stearns call
here's a golden oldie from a few months ago when someone off
camera calls Jim Cramer on it...
http://www.youtube.com/watch?v=KOnLFZtquEE
Great call Crimer
Help. I bought stock at about $48 and sold about $270... That was nice, then they did the apology thing and I went back and bought some at about $109. Do you think I will ever get my initial investment back? - Problem is my husband doesn't yet know I re-bought. Stupid, I know.