While I can see a short sharp sell-off, and quick rebound, at some point if the markets struggle, this is one to start buying around the $300 level. Its ok people saying there are low barriers to entry, yes thats true, but not all companies will have funding to create their own content output. That is where many people seem to overlook the potential with Netflix.
Maybe we have missed the bounce off the bottom? I have a suspicion that we will get at least one more opportunity. Markets are still a little choppy to say the least.
It looks like we may well have missed the bounce on this one with a significant jump yesterday. However, I would not panic into buying the shares just yet as the market woes still have some way to go in my opinion.
Perhaps another couple of difficult days on the market and we might be able to buy Netflix around the $300 mark? Current movements do not necessarily represent fundamentals for each company but more an overview of the economy and the challenges in the short to medium term.
Interesting information: there was a huge options volume just before earnigs release. In the options terms it was straddle - buying both Calls and Puts and waiting for the movement in any direction. For the straddle to become profitable or even reach breakeven, the price should move at least 5% in any direction. This all means that NFLX becamo more volatile.
The option induced volatility together with the rocky markets has created a situation where investors with a long term time horizon might be able to grab some "cheap" stock if the shares fall any further. Still got $300 in my mind if I am honest.
A mix of people taking profits and a general market and techy share sell-off has created a nightmare scenario for NFLX just now. I still think the company has massive potential in the long term, especially now it is making headline grabbing content itself.
Is it possible that Netflix could become a takeover target if the shares weaken in the short to medium term? Either way, I think we are now getting towards serious buying territory.
A recent report suggests that Netflix could lose up to 25% of its customer base if it were to add adverts to its service. Surely the company would not take this kind of chance?