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Netflix shares soar - 2 million new subscribers

post #1 of 5
Thread Starter 
With all the recent news regarding Netflix, the most important might be this: Financially, they are back on solid ground. It's been a tough year overall for Netflix, but their strategy, focused on connected TV sets and television content appears to have paid off. Netflix stock is up an astonishing 33% in after-hours trading when the comapny announced the addition of 2 million subscribers this past quarter, bringing the subscriber base for streaming content up to 27 million.

We'll see what the stock market does when it opens, but in after-hours trading, Netflix stock is up as much as 35%.
Quote:
Netflix's Internet video service warded off stiffer competition to add 2 million U.S. subscribers during the final three months of the year to produce an unexpected profit for the company.

Read more: http://www.sfgate.com/business/technology/article/Netflix-s-stock-soars-on-big-4Q-subscriber-gains-4217894.php#ixzz2IqKz601F
Quote:
Netflix Inc. ended a volatile year on a high note, beating expectations for revenue and subscriber growth in the fourth quarter, which ended Dec. 31 -- sparking a nearly 35% spike in the company's stock in after-hours trading.
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-netflix-adds-subscribers-20130123,0,6196885.story

Edited by imagic - 1/24/13 at 1:29am
post #2 of 5
Won't do anything for their streaming quality (Blu-ray level and above PQ and 7.1 lossless audio)... when has it ever? More profits don't usually mean investment in infrastructure, just more in the pockets of the executives and shareholders.
post #3 of 5
More proof that for the vast majority of people quality is not high on the list of priorities.
post #4 of 5
To the contrary- More profits are usually put to work in the company first, salaries and bonuses second, and stock holder's last to none at all. Netflix has no dividend so the only way a shareholder can reap a return on his investment is to sell when the stock goes up. When you see the company declare a dividend or increase the dividend then you may make the claim that the increased profits benefit the share holder. If you see the executives and employees get bonuses and stock options, then and only then may you make the claim that the profits benefit the executives. With Netflix, the additional profits which has been miniscule, are used to maintain the licenses and improve the delivery via streaming technology.

What you have stated is you set a threshold level for your desired performance of the service and assume that until that is reached, the company is not investing profits back into the service. I think anyone who responsibly researches the facts will have to admit Netflix has spent most of it's revenue on the huge increase in costs of licensing content and increasing the backup of alternative streaming services.

The market spike in the stock market price of the Netflix stock, is mostly a result of Carl Ichan public statements and not a function of the profitability. The fact that he has become a heavy investor sparks others to ride along causing the stock to pop. When Carl is satisfied with his gain he will dump out and then the stock will fall off the cliff. None of this has anything to do with the fundamentals of the company.
post #5 of 5
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Edited by PobjoySpecial - 5/16/13 at 2:17pm
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