Barron’s on Netflix

Barron’s short thesis for NFLX this morning is spot on, IMO. In short (no pun intended), NFLX:

  1. Does not own its key hits (i.e. it licenses them)
  2. Will burn over $2 billion of cash in 2017…which I will add is a point of pride for CEO Reed Hastings, who says it’s a sign of growth/”success”
  3. Has $4.8 billion of LT debt, that the market is largely OK with because its equity market cap of $74 billion “dwarfs” the debt load 🤔

The following paragraph highlights what I alluded to yesterday, that the DISCK/SNI and DIS moves to “pull and Adobe” will place a premium on quality content AND content production (i.e. would Amazon or Netflix be interested in a Viacom for content production purposes): 


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