Friday , January 22 2021

Netflix's worst nightmare is coming




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If you've read & nbsp;RiskHedge, you know I have warned you to keep money from the Netflix (NFLX) expensive stock market.

It was not a popular thing to say & nbsp;when I first wrote it in July.

Then Netflix was the hottest action on Wall Street. It grew by 107% in six months, reaching record heights.

But it turns out that July is the right time to sell Netflix. Since then, 37% has been crashed:

RiskHedgeRiskHedge

Netflix's best days are over

You can review your reasons why Netflix is ​​doomed & nbsp;here& Nbsp; and & nbsp;hereIt comes down to the life cycle of the destructive business.

Netflix is ​​a pioneer in streaming video where you watch shows over the Internet rather than on cable TV.

For years this has been the only streaming service in the city. Early investors make this first-hand advantage at 10,000% profits from 2008 to July this year.

Today I see three other companies in the same position Netflix was again in 2008. I wrote a free special report for these stocks with in-depth research and my proposed purchase prices. Download it here for free.

But for Netflix, the era of almost zero competition is over.

Now he faces powerful rivals such as Disney (DIS)which I recommended to buy in July.

Disney will launch its own streaming service called Disney + next year. She will pull out all of her shows and movies from Netflix and put them in Disney + instead.

This is a huge problem for Netflix because Disney has the best content in the world with a long shot. She owns household brands like Marvel … Pixar Animation … Star Wars … ESPN … ABC … X-Men … not to mention all the traditional characters like Mickey Mouse and Donald Duck.

When it opens next year, Disney + will be a purchase for most families. I will definitely subscribe to my daughter.

Meanwhile, Netflix will lose many of its best content … and potentially millions of subscribers who switch to Disney +.

Amazon also earned in the stream

In February, Amazon (AMZN) announced it will spend $ 5 billion to develop original shows and films this year. In response, Netflix increased its cost by 50%.

Netflix plans to spend $ 8 billion on shows and series this year … it will now spend approximately $ 12 billion. Now she invests more in content than any other American television network.

Keep in mind that Amazon is the third largest publicly traded company on the ground. It has much deeper pockets than Netflix or even Disney.

In order to have hope of dealing with its competitors, Netflix should continue to increase its content costs.

The problem is that it can not.

Netflix made only a small profit, so he had to take out loans to fund his show. Its debt grew by 71% in the past year to $ 8.3 billion.

This is not sustainable.

Now Netflix has three bad choices: to continue borrowing billions and burying deep in debt … drastically increases its subscription prices … or reduces the volume of new content.

I recommend Disney

Netflix was traded at $ 400 when the warning was first heard …

It has fallen to about 275 dollars today. & Nbsp;And as I mentioned last time, my studies show that it costs $ 190 – $ 200 per share, max.

So, Netflix is ​​still "without touch".

Disney, on the other hand, has gained 11.5% since July and reached perennial peaks earlier in November. This is more impressive, as most stocks have fought over the past few months.

Disney is still a great buy at today's $ 116 price. My study shows that it is targeting $ 170 – about 45% higher than today.

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If you have read RiskHedge, you know I have warned you to keep money from the Netflix (NFLX) expensive stock market.

It was not a popular thing when I wrote it for the first time in July.

Then Netflix was the hottest action on Wall Street. It grew by 107% in six months, reaching record heights.

But it turns out that July is the right time to sell Netflix. Since then, 37% has been crashed:

Netflix's best days are over

You can review your reasons why Netflix is ​​doomed here and here. It comes down to the life cycle of the destructive business.

Netflix is ​​a pioneer in streaming video where you watch shows over the Internet rather than on cable TV.

For years this has been the only streaming service in the city. Early investors make this first-hand advantage at 10,000% profits from 2008 to July this year.

Today I see three other companies in the same position Netflix was again in 2008. I wrote a free special report for these stocks with in-depth research and my proposed purchase prices. Download it here for free.

But for Netflix, the era of almost zero competition is over.

Now I am facing powerful rivals such as Disney (DIS) I recommended to buy in July.

Disney will launch its own streaming service called Disney + next year. She will pull out all of her shows and movies from Netflix and put them in Disney + instead.

This is a huge problem for Netflix because Disney has the best content in the world with a long shot. She owns household brands like Marvel … Pixar Animation … Star Wars … ESPN … ABC … X-Men … not to mention all the traditional characters like Mickey Mouse and Donald Duck.

When it opens next year, Disney + will be a purchase for most families. I will definitely subscribe to my daughter.

Meanwhile, Netflix will lose many of its best content … and potentially millions of subscribers who switch to Disney +.

Amazon also earned in the stream

In February, Amazon (AMZN) announced it will spend $ 5 billion to develop original shows and films this year. In response, Netflix increased its cost by 50%.

Netflix plans to spend $ 8 billion on shows and series this year … it will now spend approximately $ 12 billion. Now she invests more in content than any other American television network.

Keep in mind that Amazon is the third largest publicly traded company on the ground. It has much deeper pockets than Netflix or even Disney.

In order to have hope of dealing with its competitors, Netflix should continue to increase its content costs.

The problem is that it can not.

Netflix made only a small profit, so he had to take out loans to fund his show. Its debt grew by 71% in the past year to $ 8.3 billion.

This is not sustainable.

Now, Netflix has three bad choices: to continue borrowing billions and taking deeper debt … drastically raise subscription rates … or reduce the volume of new content.

I recommend Disney

Netflix was traded at $ 400 when the warning was first heard …

It has fallen to about 275 dollars today. And as I mentioned last time, my research shows that it costs $ 190- $ 200 per share, max.

So, Netflix is ​​still "without touch".

Disney, on the other hand, has gained 11.5% since July and reached perennial peaks earlier in November. This is more impressive, as most stocks have fought over the past few months.

Disney is still a great buy at today's $ 116 price. My study shows that it is targeting $ 170 – about 45% higher than today.


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