Stocks and Trading Thread - Channeling your inner Mono

[DGuller]

In a little over 3 months, Netflix managed to lose 72% of its market cap.  That's quite an impressive destruction of shareholder value by any measure.    To be fair, though, the valuation seems to have been extremely insane to start with, so it was bound to crash sooner or later when the unrealistic growth expectations would not pan out.

[DGuller]

Booyah!

NFLX - Cramer's 'Mad Money' Recap: Don't Abandon Ship
Netflix

Jim Cramer recommended:    buy
Date:    Tuesday, July 26, 2011
Price Then:    $266.91
Price Now:    $118.84
Return:    -55.48%
Jim Cramer on NFLX
Tuesday, July 26, 2011


The question is not whether or not to sell, it's whether the dip in the company's price is a buying opportunity. He said Netflix management has delivered time and time again, and it's unlikely that the company just shot itself in the foot by raising prices. Subscribers will not be leaving in droves because of a few dollars, he said. Netflix is extremely cheap. Given that the company just expanded into Latin America and will be conquering Europe soon, Cramer said Netflix is still a buy.

thestreet.com
Cramer's 'Mad Money' Recap: Don't Abandon Ship

 

[Ed Anger]

I'm surprised he has had time for Netflix, since he has been too busy recently sucking Apple cock.

[Admiral Yi]

Nice to see the S&P back up to 1250.  Just a couple more bucks and I'll be breaking even on my purchase on the first day of the summer crash. 

[The Minsky Moment]

Holy shit! What the fuck happened?  Surely this isn't a reaction to the expansion of streaming services to other countries?

Part of it is the latter.
The other part is that Netflix revealed that its margins on the physical DVD business are 50% while the margins on streaming is 8%.

[Tamas]

Tomorrow's EU meeting has been cancelled.

HIDE YOUR KIDS, HIDE YOUR WIVES!

[DGuller]

Holy shit! What the fuck happened?  Surely this isn't a reaction to the expansion of streaming services to other countries?

Part of it is the latter.
The other part is that Netflix revealed that its margins on the physical DVD business are 50% while the margins on streaming is 8%.

Why again are they trying to let the DVD service collect dust?

[The Minsky Moment]

Why again are they trying to let the DVD service collect dust?

Presumably the people asking that question are the ones selling the stock . . .

[MadImmortalMan]

Amazon's turn. Missed quarter. Down 30 pts in after hours already.

[Tamas]

Amazon's turn. Missed quarter. Down 30 pts in after hours already.

but, isn't that obviously for their huge-ass orders of the new kindle lines?

[MadImmortalMan]

Product cycle spending may explain it, yes. One thing about AMZN is they don't have a huge margin on their profitability. They really have to make investments like this count.

SAN FRANCISCO (MarketWatch) -- Amazon.com Inc. said Tuesday afternoon that earnings plunged by 73% in the third quarter as a sharp ramp-up in spending offset a strong surge in sales. For the period ended Sept. 30, Amazon reported net income of $63 million, or 14 cents a share, compared to net income of $231 million, or 51 cents a share, for the same period the previous year. Revenue jumped 44% to $10.88 billion. Analysts were expecting earnings of 24 cents a share on revenue of $10.95 billion for the quarter, according to consensus forecasts from FactSet Research.

[MadImmortalMan]

Plus this.



Kindle Fire list price: $199

[Tamas]

yeah but their market share is pretty solid, since basically they are the market. The Apple buzz is going to go only downhill from now on, with Jobs no longer showcasing the new funky gadgets, so Amazon can bite off a big chunk of the music sales as well I would guess, and online content in general.

if we werent in front of a major panicky sell-off due to the greek default, I'd buy and hold amazon here.

[DGuller]

yeah but their market share is pretty solid, since basically they are the market. The Apple buzz is going to go only downhill from now on, with Jobs no longer showcasing the new funky gadgets, so Amazon can bite off a big chunk of the music sales as well I would guess, and online content in general.

if we werent in front of a major panicky sell-off due to the greek default, I'd buy and hold amazon here.

Just because a company is solid doesn't mean that it can't be overvalued.  If investors think that a solid company is uber-awesome, and will eventually have a market cap of twice the world's GDP, there is a possibility of a stock price crash down the line.

I agree that Amazon is here to stay for a long time.  They have the brand name and the dominance in the industry where economy of scale rules.  That doesn't mean that no price is too high for them, though.

[Tamas]

yeah but their market share is pretty solid, since basically they are the market. The Apple buzz is going to go only downhill from now on, with Jobs no longer showcasing the new funky gadgets, so Amazon can bite off a big chunk of the music sales as well I would guess, and online content in general.

if we werent in front of a major panicky sell-off due to the greek default, I'd buy and hold amazon here.

Just because a company is solid doesn't mean that it can't be overvalued.  If investors think that a solid company is uber-awesome, and will eventually have a market cap of twice the world's GDP, there is a possibility of a stock price crash down the line.

I agree that Amazon is here to stay for a long time.  They have the brand name and the dominance in the industry where economy of scale rules.  That doesn't mean that no price is too high for them, though.

fair point