The Lemon Fool

Share price has taken a beating in the last six months.

Anyone looked more closely at this stock?

Would its acquisition be of interest to other streaming companies with deep pockets? Amazon? Disney? Apple?

AiY(D)

AsleepInYorkshire wrote:Share price has taken a beating in the last six months.

Anyone looked more closely at this stock?

Would its acquisition be of interest to other streaming companies with deep pockets? Amazon? Disney? Apple?

Netflix is the only one of the FAANG shares that I do not own, so that worked out as it happens.

Could be tempting now that it has lost 2/3 of its market value in a few months, but since I own those other three you mentioned (plus MicroSoft), I think I am fully invested in the space.

AsleepInYorkshire wrote:Share price has taken a beating in the last six months.

Anyone looked more closely at this stock?

Would its acquisition be of interest to other streaming companies with deep pockets? Amazon? Disney? Apple?

AiY(D)

I don't know if you ever listen to Steven Yiu of Blue Whale growth fund. He commented a couple of months ago on Netflix and he wasn't complimentary about it at all. I have a lot of time for what Yiu says and I think he was spot on about Netflix. In a nutshell, he thinks it is a company that is unlikely to ever be profitable. He reckons the amount of investment required just to stay still, let alone being ahead of the competition, means longer term it will never make enough money. Of course, he could be wrong.

Of further interest is that yesterday, Bill Ackman reportedly took a $430 million loss on his quite recent purchase of Netflix stock.

Netflix could be the next Blockbuster. Remember them?

BullDog wrote:Netflix could be the next Blockbuster. Remember them?

It looks as if, like 'Meta' before them, Netflix are now considered 'ex-growth' and rerated accordingly? If so, something fairly extraordinary would be needed to promote them back to 'growth' and an elevated PER.

BullDog wrote: growth fund. He commented a couple of months ago on Netflix and he wasn't complimentary about it at all. I have a lot of time for what Yiu says and I think he was spot on about Netflix. In a nutshell, he thinks it is a company that is unlikely to ever be profitable. He reckons the amount of investment required just to stay still, let alone being ahead of the competition, means longer term it will never make enough money.

As for the possibility of a takeover, I imagine there would be regulatory issues if Apple, Amazon or Disney tried to buy them, as they all have streaming businesses and a takeover by one of them would reduce competition.

MicroSoft or Google would be less troubled by that. But even now Netflix is still a $100 billion company, which is a lot of spare change to come up with.

Lootman wrote:

BullDog wrote: growth fund. He commented a couple of months ago on Netflix and he wasn't complimentary about it at all. I have a lot of time for what Yiu says and I think he was spot on about Netflix. In a nutshell, he thinks it is a company that is unlikely to ever be profitable. He reckons the amount of investment required just to stay still, let alone being ahead of the competition, means longer term it will never make enough money.

As for the possibility of a takeover, I imagine there would be regulatory issues if Apple, Amazon or Disney tried to buy them, as they all have streaming businesses and a takeover by one of them would reduce competition.

MicroSoft or Google would be less troubled by that. But even now Netflix is still a $100 billion company, which is a lot of spare change to come up with.

Anything is possible, naturally. However, I think it more likely that the competition can just wait for Netflix to decay and rot. Amazon, Microsoft, Apple, Disney, Sky...... none of them need to bolt on Netflix. In my opinion, of course.

BullDog wrote:I don't know if you ever listen to Steven Yiu of Blue Whale growth fund. He commented a couple of months ago on Netflix and he wasn't complimentary about it at all. I have a lot of time for what Yiu says and I think he was spot on about Netflix. In a nutshell, he thinks it is a company that is unlikely to ever be profitable. He reckons the amount of investment required just to stay still, let alone being ahead of the competition, means longer term it will never make enough money. Of course, he could be wrong.

My view as well. Netflix spends money like water, hoping that it will find a hit. That worked when it didn't have any serious competition but now it has, amongst others, Amazon and Disney and Warner Brothers Discovery. All are spending a ton of money.

Customers are getting used to binge watching a streaming service for a few months, then cancelling and binging another. Disney doesn't suffer as much churn, that's probably due to children using it and parents not wanting to risk upsetting them.

In the last couple of months I've gone off streaming as an investment because of rising costs, fierce competition and churn. Sold all of my Disney and ViacomCBS plus half of Lions Gate.

SalvorHardin wrote:In the last couple of months I've gone off streaming as an investment because of rising costs, fierce competition and churn. Sold all of my Disney and ViacomCBS plus half of Lions Gate.

Yes but Disney has many other businesses plus a wealth of historically desirable content. Netflix, as you say, is only as good as its last show.

Likewise Viacom has a few income streams like CBS and Paramount, but Netflix is the pure play - it does nothing else and so will catch flu when the others merely catch a cold.

Lootman wrote:

SalvorHardin wrote:In the last couple of months I've gone off streaming as an investment because of rising costs, fierce competition and churn. Sold all of my Disney and ViacomCBS plus half of Lions Gate.

Yes but Disney has many other businesses plus a wealth of historically desirable content. Netflix, as you say, is only as good as its last show.

Likewise Viacom has a few income streams like CBS and Paramount, but Netflix is the pure play - it does nothing else and so will catch flu when the others merely catch a cold.

Exactly.

Lootman wrote:Yes but Disney has many other businesses plus a wealth of historically desirable content. Netflix, as you say, is only as good as its last show.

Likewise Viacom has a few income streams like CBS and Paramount, but Netflix is the pure play - it does nothing else and so will catch flu when the others merely catch a cold.

Disney is sabotaging itself by going uberwoke. "Hello boys and girls" has been banned in the parks and Disney has decided to promote radical sex and gender politics aimed specifically at young children (but not in China).

Disney is pushing for 50% of its new characters to be LBGTIABCD... (whatever the latest alphabet soup is). That's gone down like a lead balloon with lots of parents and the share price has tanked.

ViacomCBS (now called Paramount Global) meanwhile is still run primarily for the controlling family. Its management looks to have seen how Disney wrecked Star Wars whilst deliberately pissing off lots of the fanbase and thought they should do the same with Star Trek.

There's also a hangover because of last year's short squeeze and thecArchegos family office buying ridiculous amount of its shares before defaulting on its debts (share price rose from $30 to $100 then collapsed to $30)

Lions Gate was a mixture of nervousness about streaming, that my stake had become uncomfortably large and my looking to raise some cash to invest in Farmland Partners and Thales.

SalvorHardin wrote:

Lootman wrote:Yes but Disney has many other businesses plus a wealth of historically desirable content. Netflix, as you say, is only as good as its last show.

Likewise Viacom has a few income streams like CBS and Paramount, but Netflix is the pure play - it does nothing else and so will catch flu when the others merely catch a cold.

Disney is sabotaging itself by going uberwoke. "Hello boys and girls" has been banned in the parks and Disney has decided to promote radical sex and gender politics aimed specifically at young children (but not in China).

Disney is pushing for 50% of its new characters to be LBGTIABCD... (whatever the latest alphabet soup is). That's gone down like a lead balloon with lots of parents and the share price has tanked.

Disney has always been like that. Back in the 1990s the fund manager I worked for had the Southern Baptists pension fund as a client. They wanted a S&P 500 minus Disney fund, i.e. a S&P 499 fund.

The reason? Disney was at the time the only major US company that offered healthcare benefits to the same sex partners of their employees!

Lootman wrote:

SalvorHardin wrote:

Lootman wrote:Yes but Disney has many other businesses plus a wealth of historically desirable content. Netflix, as you say, is only as good as its last show.

Likewise Viacom has a few income streams like CBS and Paramount, but Netflix is the pure play - it does nothing else and so will catch flu when the others merely catch a cold.

Disney is sabotaging itself by going uberwoke. "Hello boys and girls" has been banned in the parks and Disney has decided to promote radical sex and gender politics aimed specifically at young children (but not in China).

Disney is pushing for 50% of its new characters to be LBGTIABCD... (whatever the latest alphabet soup is). That's gone down like a lead balloon with lots of parents and the share price has tanked.

Disney has always been like that. Back in the 1990s the fund manager I worked for had the Southern Baptists pension fund as a client. They wanted a S&P 500 minus Disney fund, i.e. a S&P 499 fund.

The reason? Disney was at the time the only major US company that offered healthcare benefits to the same sex partners of their employees!

Rather ironic given that Walt Disney was reputed to be a quasi Nazi!
https://www.pastemagazine.com/politics/ ... of-disney/

It's quite hard to find anything worth watching on any of the streamers - Netflix, Apple+TV, Prime etc
They all have a few good programmes but vast amounts of dross.
So when you've watched the good ones, it is tempting to cancel and then periodically re-subscribe briefly to catch up on anything worth watching.
Not a good business model from their perspective

Lootman wrote:Disney has always been like that. Back in the 1990s the fund manager I worked for had the Southern Baptists pension fund as a client. They wanted a S&P 500 minus Disney fund, i.e. a S&P 499 fund.

The reason? Disney was at the time the only major US company that offered healthcare benefits to the same sex partners of their employees!

This time Disney has stirred up a hornet's nest. A big one. Disney benefits from a law passed in 1967, specifically for Disney, which allows it to act as the municipal government within its parks in Florida.

After Disney publicly opposed Florida’s Parental Rights in Education law, Florida's governor has proposed that the 1966 law should be abolished. Florida's State Senate has approved this and the House should confirm it very soon. This will cost Disney a lot and hamper its business.

http://www.latimes.com/entertainment-arts/business/story/2022-04-20/what-happens-if-disney-loses-its-self-government-powers-in-flordia

Can't beat the BBC, total bargain.

We've deleted all sides on our TV except the BBC and Talking Pictures. Makes life much simpler and enjoyable.

scrumpyjack wrote:It's quite hard to find anything worth watching on any of the streamers - Netflix, Apple+TV, Prime etc
They all have a few good programmes but vast amounts of dross.
So when you've watched the good ones, it is tempting to cancel and then periodically re-subscribe briefly to catch up on anything worth watching.
Not a good business model from their perspective

The worst offenders are the American series that start off really gripping, but as each episode ends and the next one starts, you realise that they're simply stretching the story out as long as they think people will bear it. So many of them would be excellent if max four episodes, but after ten, you start to lose all hope!

I really liked the Swedish series 'Caliphate' and the American series about the guy who shot Versace. The actor is amazing and the character he plays one of the most disturbing in years!

Steve

scrumpyjack wrote:It's quite hard to find anything worth watching on any of the streamers - Netflix, Apple+TV, Prime etc
They all have a few good programmes but vast amounts of dross.
So when you've watched the good ones, it is tempting to cancel and then periodically re-subscribe briefly to catch up on anything worth watching.
Not a good business model from their perspective

I've found AcornTV to be surprisingly good. A wide selection of mostly British, Australian and New Zealand TV, some of which is made for AcornTV.

In particular they have several comedy-dramas aka "cozy murder mysteries" featuring late middle aged lady amateur detectives (Agatha Raisin, Queens of Mystery, Harry Wild). Quite a bit of classic TV (e.g. The Irish RM)

Jack Irish is the standout Australian show IMHO. Guy Pearce plays a criminal defence lawyer turned debt collector who helps his gambler friend run racetrack betting coups, and also does a bit of private detective work.

The Brokenwood Mysteries is New Zealand's answer to Midsomer Murders. Set in a small town with an extremely high murder rate and a lot of quirky locals (some of whom appear in many episodes (7 series = 30 episodes so far, they've just finished making series 8).

Seeking Alpha has published several articles today about Netflix's recent results, and the subsequent hammering of its share price, that might be of interest. Link below:

https://seekingalpha.com/symbol/NFLX

As for potential acquisitions, it's always a possibility in the ever-evolving streaming industry. Companies like Amazon, Disney, and Apple have deep pockets and are constantly looking to expand their streaming offerings. Acquiring Netflix could give them a significant edge in the market.