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Netflix is now worth more than $100B

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Re: Netflix is now worth more than $100B

#171

Netflix is going to tank if Disney makes their stuff (including Fox) exclusive to hulu or a new service.

Disney is pulling/will pull out a lot of stuff from Netflix[1] and will also start its own streaming service[2]... and Netflix' catalog had already shrunk a lot before that news[3].

1.https://www.cnbc.com/2017/08/08/disney-will-pull-its-movies-...

2. https://www.nbcnews.com/pop-culture/tv/disney-start-own-stre...

3. http://www.businessinsider.com/netflix-catalog-size-shrinks-...

Re: Netflix is now worth more than $100B

#172

Earlier quoted context omitted.

If netflix doesn’t pay a dividend, does a P/E analysis still make any sense?

Yes. Any public company must ultimately pay a dividend to be valuable. Edit: All of my responders are ignoring my use of "ultimately". A company can certainly invest in growth, but growth only matters if the company eventually returns money to shareholders, and the only way to do that is a dividend.

Not true - another way to return money to shareholders is to buy back their own stock. https://www.bloomberg.com/quicktake/buybacks-dividends

Re: Netflix is now worth more than $100B

#173
post #141

Earlier quoted context omitted.

There absolutely is. For a company to be valuable, it must return more profit to shareholders than they put in. The P/E ratio indicates how long it will take for this to happen.

That's under the assumption that all you can do with a stock is hold onto it and pocket all the profits. If I buy a house, put in a pool, then sell the house for $100k more than I bought it a year later, it doesn't matter too much what the initial price was, except in comparison to other investments You can always sell the Netflix stock after pocketing some dividends or something. The purchase price is not money lost…

In raw "what is possible" terms I cannot fault you. But I really like the idea of fundamentals, and "what is likely" is a different kettle of fish.

In a sense, share prices compete with the cost of starting a new company that does the same thing. P/E ratios of 230:1 mean an increasing risk that instead of someone buying your shares, they go and start a competitor. Then everyone buys that competitor instead.

In any market there is an upper limit to the P/E ratio, and nobody wants to be the buyer who finds it. Especially if the company's income doesn't rise; because then you have to sell at a loss to recover any money.

In practice, there is also the risk of catching a collapse in the market. They happen that, once every decade or so? Great time to be able to rely on an income stream when that happens.

Re: Netflix is now worth more than $100B

#174

I study stock market for more than a decade, for long term, and I perfectly now that company data should not be analysed in a isolatedly, but, any stock with P/E ratio 230.24 you need to be very careful, and put just the money you can afford to lose without disturb your sleep. For whom that does not understand company ratios, a P/E ratio 230.24 is meaning that you need 230 years of profits to return to you the price…

This view ignores revenue growth. If the company is growing like a weed it may choose to reinvest everything and keep profit near zero. If there's no dividend the profit would just go into a war chest and collect some minimal interest rate. If the company thinks it can get a better return on investment by spending all income on growing itself it has every reason to do so, and all it has to do is beat that minimal interest rate. The only reasons not to: you have no ideas where to spend your own money to result in growth, you expect that reportable earnings will look good to some investors, you want a war chest to make some giant acquisitions, or you're planning on starting to issue a dividend relatively soon.

Amazon has always had near zero earnings. Over the last 10 years its grown from ~$17 billion revenue to ~$140 billion in revenue. Yet they have almost no earnings! Barely profitable! It's wild and irresponsible! Yet Amazon is not on the brink of collapse. Despite near 10x growth their earnings have always been completely flat, near zero. Why is that? They're not booking earnings because they can't, they're not booking earnings because they're choosing not to, by spending it on growing themselves. It could be seen as a good thing: Amazon has lots of areas to invest in itself, if they didn't, maybe they're running out of ideas. Netflix has also grown by about the same multiple over the same time period as Amazon.

Now, on the other hand, Netflix's price to sales is about twice that of Amazon. Amazon's price to sales is about the same as Apple.

Re: Netflix is now worth more than $100B

#175
post #36

Earlier quoted context omitted.

There's always usenet, with retention rates increasing every day.

Is that still going on? Last time I looked (a while ago) forums where flooded with junk and eveything else was DMCA-ed.

I've been using a private tracker for the past couple years, and I know some of the larger public trackers have been shutdown.

On the private trackers I haven't found trouble finding mostly anything.

Re: Netflix is now worth more than $100B

#176
post #18

Earlier quoted context omitted.

Unfortunately they've been letting their back catalog rot away but I still find a minimal DVD subscription to be a good way to watch both brand new and older films.

Not only the catalog is rotting, but The physical discs have as well. We resubscribed to disc service last year, but have had a surprising number of cracked or heavily scratched discs compared to years ago.

I expect they're symptoms of the same thing. They keep discs until someone returns them as not readable. Then they chuck them and don't replace them.

I can't say I've had a particular problem with bad discs recently but I also have a minimal plan so my sample size is relatively small.

Re: Netflix is now worth more than $100B

#177

Earlier quoted context omitted.

> The problem is there's no growth to be found anywhere. Cryptocurrencies and ICOs. Applied neural networks. Automation. Good electric cars. To the point where people are prepaying for something that might be built in a few years. Good cheap batteries.

>Cryptocurrencies and ICOs. What value is being created here, exactly? There's plenty of idealistic notions being thrown around, but I've yet to see a single, real, useful product or service materialize >Applied neural networks. Same. >Automation. This is way too broad to be invested in. Of course the world is automating at a greater rate, but is this a cause for growth? Will automated factories produce more goods fo…

> single, real, useful product or service materialize

The ASX is implementing blockchain for its ledger, via the digitalassets company. Right now.

HST voting dapp is being used at the world economic forum, this week.

Thats two I know of, off the top of my head.

As well as the obvious btc and eth being used to purchase stuff everyday, all over the world.

Its actually happening if you bother to look.

Re: Netflix is now worth more than $100B

#178

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

The 12 month forward earnings yield of S&P 500 was 5.4% as of last Friday, with a minority of analysts having updated their earnings estimate to incorporate recent tax rate changes. That yield means there's still an equity premium, even if earnings stay flat after 2018.

Re: Netflix is now worth more than $100B

#179

Earlier quoted context omitted.

That's how people justify investing in Amazon. But I don't know how they think Amazon can just stop reinvesting one day and make money. Every business line Amazon has is hyper competitive. Can Amazon actually raise prices in any of their businesses?

> Amazon can just stop reinvesting one day and make money Does the money disappear if they stop reinvesting?

If you are a tech company... Yes.

Re: Netflix is now worth more than $100B

#180
post #65

How do they make money?? I mean - seriously? And how will they stand up now that NN is gone and any company/website using much more traffic will be force to pay more? Please help me with the math -- at any given day, me, my wife and 2 kids are streaming netflix on multiple devices in HD; most likely pulling tens of gigabytes of data per day. How is that all covered under $10.99 per month?? and on the top - they make…

The problem is that if you're big enough business-wise you don't care that much about NN. It's like in Germany when Google has to pay for content in Google News and they just tell the publishers they will not include them if they don't give it to them for free despite these new rules (which are stupid). But if you're a small startup or company and you want to do this you have no chance doing this. Same goes for NN. I…

That might change when you are in competition with the ISP, as Comcast does with a ~30% stake of Hulu. Then you might start to care about net neutrality a lot.
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