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from the drawbacks-of-being-a-public-company dept.
The Schall Law Firm, a national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Netflix, Inc. ("Netflix" or "the Company") (NASDAQ: NFLX) for violations of ยงยง10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.
The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors. Netflix announced its second quarter 2019 earnings on July 17, 2019. During the Company's earnings call, as well as in its shareholder letter, it was revealed that Netflix gained only 2.7 million new subscribers against a forecast of 5 million new subscribers. Based on this startling news, shares of Netflix dropped by more than 13% over the next two days.
https://www.businesswire.com/news/home/20190719005440/en/
(Score: 0) by Anonymous Coward on Sunday July 21 2019, @05:51AM (5 children)
I'm perfectly calm. I'll keep acting like infinite growth is the rational assumption, you keep assuming otherwise.
Netflix in particular has obviously peaked, people will go back to torrents and other pirating methods when market fragmentation makes it too inconvenient to watch a few movies/shows in a row for a reasonable price. And once they are in the habit, the subscriptions will get cancelled first month by month based on whatever is on there, then forever. Their stock is priced for insane growth (p/e was like $130), so a slowdown in growth is a very bad thing for them... which is why it is dumping. If the peak is in, it will need to drop to ~$50 to have a normal p/e.
(Score: 3, Insightful) by AthanasiusKircher on Sunday July 21 2019, @06:14AM
You're almost certainly right that Netflix is overvalued, as are most stocks. That's typical in markets driven by speculation.
I wasn't at all arguing that selling Netflix stock is irrational at this time. I haven't looked at the numbers, but I have no reason to doubt your analysis which sounds about right. It's probably a good time to get out if one is invested in it. I was just noting that our metrics for company success are rather irrational.
And you keep on believing that "infinite growth" is a rational assumption. Meanwhile, I'll await the heat death of the universe.... :)
(Score: 2) by AthanasiusKircher on Sunday July 21 2019, @06:25AM (1 child)
Also, in case my last reply to you seems surprising, note that my original post was asserting the *collective* irrationality of investors. It may indeed be quite rational for individual investors to sell now (and if I had any Netflix stock, I likely would have sold it a year or two ago). The speculation may also appear to be rational for individuals too.
It's just collectively that all these actions end up with a market that ultimately works against the interests of consumers and indeed often against the long term interests of the companies.
(Score: 0) by Anonymous Coward on Sunday July 21 2019, @06:42AM
Sure, just like publishing bs instead of science works against the interest of humanity and even the individual researcher. But if you make sure people need to do it to keep their career you'll get bs 99.99% of the time. I mean this will likely destroy our cultural environment long before humans can destroy the physical environment, but that's what we got once the government started dominating research.
(Score: 1) by khallow on Monday July 22 2019, @05:18AM (1 child)
Not even wrong. Nobody brings up "infinite" economic growth like it were rational. So you're going to act like an irrational thing were rational?
(Score: 0) by Anonymous Coward on Tuesday July 23 2019, @01:18AM
Yes, that is the crazy world central banking has brought us.