Loading ...Netflix just reported. Their stock soared and is a few bucks from an all-time high. The company has negative cash flow, a forecast of negative cash flow for the foreseeable future, an escalation in debt and revenue that implies the firm will never have positive cash flow and, to break that the company would have to expand subscribers (without spending a single additional dollar) by something like a factor of five, quadruple the subscription price (!) or some blend of the two — all without having to spend even more on content. They have an alleged “enterprise value” (market cap) of some three hundred times EBIDTA and are carrying roughly three times as much debt off their balance sheet as reported on it. This is true even with the insane cross-subsidy they forced ISPs to collect from non-customers during the Obama years — and which persists to this day in the United States.*********************************
With the big drop in the VIX today and this panic into the FANG stocks, I’m going back to looking for short plays again-I thought stocks were off to the races.
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