Is The SEC Investigating Netflix?

Tyler Durden's picture

While Netflix has quite often been in the news these days, typically in connection with some spurious take out rumor or another, most likely spread by infamous flip flopping longs largely underwater on the name, there could be other, more sinister news lurking underneath the surface. As Disclosure Insight, an organization that among other activities submits FOIA requests to various regulators and compiles the data to expose companies that may have undisclosed regulatory proceedings against them, the SEC just may be investigating the fallen from grace and zero barrier of entry video steaming company (for which the imminent USPS bankruptcy will be merely the finally nail in the coffin).

From Disclosure Insight, which has gone "off paywall" after one week:

Whether or not you think Netflix is in play, those with an interest in the name will surely want to take note of this data point we published for clients on 5-Dec-2011.  It is based on data we acquired from the SEC under the Freedom of Information Act regarding Division of Enforcement investigative activity.

And the original note:

Does this imply a full blown investigation into Netflix' accounting practices is imminent? We don't know (although we certainly believe it would be warranted). It is merely yet another factual red flag for investors to keep track of as they pursue various imaginary rumors revolving around dreams of some acquisition that will almost certainly never come. After all why pax X today for a company that is cash flow negative when you can pay 50% of X in 6 months?

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sabra1's picture

hey RobotTr.... i mean dad! i'm first again!!!

is there anyone out there, who is not a crook? well, i'm waiting!

CPL's picture

Break one law at a time and you'll do fine.

UGrev's picture

Consequences dictate, our course of action; and it doesn't matter if it's right, it only matters if you get caught. 

1000 bonus points for those who know the source of that quote.

TruthInSunshine's picture

I'm late to the NFLX diss-fest, but how desperate is Netflix?

If you open an account with them, as in a free trial for a month, they'll give you 15 free ebay bucks.

Bullish! /sarc/

UGrev's picture

1000 points! non-redeemable.. pretty much like zimbabwe dollars. Kudo's to another MJK fan :)

Josh Randall's picture

SEC is a better football conference than regulatory board...

LawsofPhysics's picture

Wait what?  Why isn't the SEC investigating every large bank and brokerage house?

sabra1's picture

'cause if they don't know where the money is, there is no evidence!!!

Ruffcut's picture

They are investigating whether netshits might start dialing in some porn. Higher resolution is desired.

NotApplicable's picture

And trannys. Need more of them, I hear.

jackinrichmond's picture

the sec could have a staff of one million and still not be able to investigate all the corruption...   like the TVIX, what a p.o.s. that is..   

AngryGerman's picture

"After all why pax X today for a company that is cash flow negative when you can pay 50% of X in 6 months?" - or 0% of X in 9 months?

After all why would you pay anything for a company with negative cashflow?

firstdivision's picture

Ask any M&A analyst and he'll spin it faster than Harry Wanger can spin economic data prints.

AngryGerman's picture

oh thank you, i will call my resident investment bank and ask for their expert advice.

m&a analyst, please...

tmosley's picture

Robo gets taken home in a body bag again.

Hansel's picture

Netflix is not a 'zero barrier to entry' company.  Blogs on the other hand...

High_Pockets's picture

Did Netflix forget to make a DNC payment (cough) contribution, gotta grease the camapaigner in cheif!

SheepDog-One's picture

Obama may just be forced to do a Berlusconi, rather than this assumption of all-out support for The Dork in Chief. Lets face it, no one likes him, the markets suck, the banks are flailing, everyones pissed...things arent going well at all, whats the positive to having Obama around, really? If anything, his usefullness has long since expired.

Dr. Engali's picture

Well he is good at expanding the war effort. I'm sure the military industrial complex loves him. And it is fun to watch him beg for our drones back.

williambanzai7's picture

I hope they find the DVDs my parents have been waiting for for months.

Cognitive Dissonance's picture

Netliz so reminds me of the good old days. You know, the bubble of 1996-2000 when everyone, including several mainstream compaines, added .com to their corporate name in a mad rush to be hip and cool?

Ahhhhhhhh, the good old days when all was right in the world.

firstdivision's picture

Netflix reminds you of the dotcom bubble, what about Facebook, Yelp, Groupon, etc.  At least Netflix had a tangible product of sorts.  The rest make me think bubble. 

UGrev's picture

Group(or)n.. that company takes the cake at "nothing tangible". Facebook has people. It's a giant people farm for ad companies. 

I Got Worms's picture

I love me some Netflix. I don't own any stock in Netflix (or any other company for that matter) but I think at 16$ a month, their service is a hell of a deal. I use the streaming video (w/ an Apple TV) to watch TV shows and documentaries, and the movie rental for new releases. There is no way I'm going to stand in line in a McDonalds parking lot to get a Redbox movie, or rub elbows with the masses at a Blockbuster (shudder). Even with the price hike and my limited budget, I think Netflix is still a good deal these day. Don't trade, so could care less about the stock price.

george1982's picture

so companys have plenty of excess cash!!, why dont governments (through G20 framework) legislate LAWS forcing them to invest capital (large amounts) on large scale green energy investments. it would stimulate the economy and help to slow the global catstrophe which is underway and which everyone seems to have forgotten, or am i missing something?. our politicians should be sacked for incompitence and locked up guilty of neglect for our ONLY planet.

SheepDog-One's picture

Um, well yea youre missing something, if your post is actually serious, and youve then apparently been in a cave for 3 years. The Govt HAS been pumping billions into 'green energy' companies, and theyve all gone bankrupt, and decidedly have NOT helped the economy at all we're more broke than ever.

george1982's picture

well theres many ways to skin a cat and frankly i think its not being done correctly

george1982's picture

bernanke and co arent skinnin the cat properly!!!


SheepDog-One's picture

Well go talk to guys like RoboTrader and Leo K....theyre 2 BIG 'green energy' guys...yes see how theyre doing. You guys can get together and do it right.

george1982's picture

it needs to be law enforced on the private sector, not a public sector initiative

SheepDog-One's picture

OH I see, the economy and 'green energy' need to be a 'law enforcement issue'...oh ok.

george1982's picture

well arent catalytic converters????

WonderDawg's picture

Yes, that's what we need, laws telling us what we must do with our cash. Sounds great. Sounds like freedom.

nincompoop's picture

The problem seems to be, there is no cat to skin.

fuu's picture

"legislate LAWS forcing them to invest capital"

<backs away slowly>

jcaz's picture

Wow.... Actually, you're missing so much, it's difficult to know where to begin...

Clearly, you're on the wrong site.....

"incompitence"...... Priceless....

Go with God, Greenpeace....

george1982's picture

i take it on your horizon is only $s you dont have children!!


Dr. Engali's picture

You forgot to turn off your sarc button.

lizzy36's picture

I want an Anti-Tilson ETF for Christmas. Only an Anti-Tilson ETF will do.

StychoKiller's picture

I've seen it all now -- Hippo pr0n!

realitybiter's picture

Do you think it might have been imprudent for the CEO to demand folks buy the stock a year ago at $180 and then went on to list all the reasons why?   Coinciding with managements selling of the stock?

Right or wrong, that was just dumb.


BTW, I hate NFLX, shorted the bejeezus out of it, but now think it is one of those shorts that could keep you up at night as the rumor mill sends all shorts running....only to be right it claims its true value, zero.

It is chasing blockbuster and hollywood video into the dumpster of the "history of video distribution".  itunes like pay per view is the only model that works.  If subscription worked Amazon would be a library.....but they make you buy the books you want to read because writers like getting paid for their work.....if anything, making movies is much more expensive than making books...

MFL8240's picture

How about a proper investigation of Goldman Sachs and JP Morgan?

lbrecken's picture

WAKE up i sounded the warning bell months ago there to look into accounting gimmicks

warezdog's picture

Netflix will eventually follow Blockbuster and Hollywood but it still has more life left than the other two put together.