Netflix News

posted in: Albright Way | 0

This week on Monday, October 24 Netflix announced third quarter earnings and related information which calls into question Netflix’s viability as an ongoing business.

Consider the following (all from public sources):

– In the third quarter Netflix lost 800,000 domestic subscribers
– Netflix shares shed $33.01, or nearly 28 percent, to $85.75 in Monday’s extended trading and on October 26 closed at 79.4. Netflix shares topped $300 just 3½ months ago. Netflix’s market value had already plunged by about 60 percent, or nearly $9 billion, before Monday’s late sell-off. The company spent $40 million, over the course of the third quarter, buying back 182,000 shares at an average price of $218 apiece.
– There are few tangible assets on Netflix’s balance sheet, compared to $1.57 billion liabilities and $3.5 billionn of off-balance sheet debt.
– Netflix’s Current Ratio has slid from 1.58 in Q3-2010 to 1.23 in Q3-2011.
– Netflix is being slapped with a massive class-action lawsuit over their retaining records of people’s viewing habits even after accounts have been closed and deleted.
– The prices Netflix must pay for content are growing rapidly. Recently Netflix contracted with Dreamworks paying $30 million per movie for the right to stream DreamWorks’ animated films months after they’re available on DVD.

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