Very undervalued stock, You need to buy Netflix (NasdaqGS: NFLX ). You need to understand some key point of Netflix INC. The recent move they did on raising their low prices from 7.00 a month to $8.99 a month was a big blow to the Netflix community. In its Q3 shareholder letter, last week, NFLX lost 800,000 subscribers which is a net total loss of $6.47 million dollars a month in residual income from the big online movie rentals that have taken over the rent a movie industry, almost putting blockbuster and slamming smaller rental movie companies. NFLX ended Q3 with 21.4 million streaming and 13.9 million DVD subscribers.
Trading at $184.11 on October, 24th 2011, Netflix has taken a steep decline down 73% from its July 13th closing high of $298.73. Netflix took a bear bite crashing to $77.37 on October 25th with the raise of Netflix monthly fee of more than $1.00 which has cause investors into a panic that crashing day in the stock market. Stock tips, Investors looking on buying a stock at it’s bottom should buy Netflix.
The main problem many subscribers chose to drop their membership was not only cause of the price increase but was cause of the lack of new releases netflix chooses not to keep up to par. Many subscribers think they don’t have the best selection of newer releases and Netflix constantly updates their website with old, seen and played-out movies people just don’t really care. Times are tough, Netflix should pick up on the fact that many people don’t go out to the movie theatures and choose to wait for the release of the movie to get to the DVD stands. Netflix’s problem is they do not bring these new releases to the table and procrastinate on getting the newest movie releases on their website. Netflix is becoming really popular with its online streaming movies and most consumers choose to go to that route due to the constant change in technology making it easy from the gaming consoles, to using the laptops and other devices to automatically stream off the netflix website to their favorite HD-LCD TV.
Netflix will pick up on the problem but not without a tough 4th quarter, I would buy some Call options for December, you can make a quick buck but don’t expect to buy this stock till the new year and the new annual report that will be required for the start of the first quarter of 2012. The main thing I didn’t understand, which was frustrating to the Netflix subscribers was the split in services from streaming subscribers to a different service called “Qwikster” which is $15.99 to have both services. Ever since the split back in July, netflix has gone down hill. I think they need to put an all in one payment and merge both the services together with option to have either or on a price value increase/decrease depending on what specific service you will use.
Biggest alarm is 10-Q is that NFLX now has almost $3.5 billion in content obligations. This is up significantly from Q2 which was just $2.4 billion and $1.6 billion at the end of Q1 2011. You would think this figure would grow with the growing number of subscribers and the general need to have more content to attract new subscribers, it creates the risk of a mismatch between revenues and payment obligations. Now that I gave you guys the figures off my analysis for the streaming content obligations, in addition: NFLX had $270 million of “other purchase obligations.”
Now that we know Netflix decision is not to have split services and has finally understood the mess-ups they have had to face, I think their asset loss will decrease and revenues and new subscribers will return in late 4th quarter with the stock price increasing with a bullish rally with investors understanding that with the good stock tips they find while analyzing this stock is that the bottom down stock is at it’s lowest it has been since March, 11th 2010 has the potential to be a good stock buy if you read these stock tips for netflix. Learn all the best stock tips by keeping up to date with all the stock picks and stock tips we give to you on a weekly base to help investors understand our research and fundamentals we use to analyze stocks to just prove the success of good research makes a good investor and our results on these stocks we pick just shows you what the power of knowledge and learning you gain with the stock trading tips we provide.
Below is Technical Analysis Information For Investors Looking for deeper Info on thier decision to invest in Netflix.
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