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Netflix Will Hit $300, Go Out of Business or Both

Tickers in this article: AMZN NFLX TWX
NEW YORK ( TheStreet) -- The other day -- probably because of the recent Apple (AAPL) hysteria and Facebook's (FB) 'big' announcement -- some important Netflix (NFLX) news flew under the radar.

The always-excellent Peter "Don't call me Franz" Kafka over at All Things D reported that Netflix signed a deal to stream some Time Warner (TWX) content, particularly stuff from the Turner division's Cartoon Network , Adult Swim and TNT's "Dallas."

In his coverage of NFLX/TWX, Kafka appears amused by the way Time Warner CEO Jeff Bewkes treats Netflix CEO Reed Hastings like his (what do they call it on the streets?):

Bewkes has made it quite clear that he's happy to use Netflix as a syndication outlet for stuff he's already gotten maximum value from. If Reed Hastings thinks he can make money with Bewkes's leftovers, he is happy to sell them.

Kafka outlines the drill well. Focus your eyes on my second most recent take .

Here's where we're headed with Netflix, particularly if the company reports a not-so-bad to strongish quarter next Wednesday. Even though it pulled back Wednesday, it will likely regain the $100 level. From there -- even with an earnings hit -- we're headed deeper into the triple digits. Like retouch the stock's all-time high triple digits. That was $304-and-some-change at the height of 2011's absurdity.

According to its Q3 Letter to Shareholders , Netflix expects Q4 global net income to come in between ($13M) and $2M. That's a wide range. And, unless Netflix turns a profit and surprises, expect Reed Hastings to fire up the smoke and mirrors.

He'll find something to divert attention from his company's longstanding structural problems -- an unaffordable content acquisition and international expansion strategy. Hastings will focus on subscriber growth -- if it's good or he can spin it =- and/or the number of hours Netflix customers streamed content.

If it wasn't for their competition in the streaming space, Hastings would probably compare Netflix to (AMZN) : We're spending now to seize this massive opportunity upon and ahead of us .

Of course, he will not discuss the point Kafka and others bring up: Netflix does not operate from a position of strength. Not even close. Amazon's opportunity lies in e-commerce. It's the clear and relatively comfortable leader there. It dictates the pace of the space. While Netflix leads online streaming, it has a shaky hold on the title.

It operates at the mercy of people like Jeff Bewkes. Netflix will get fleeced by Bewkes much more frequently than it will land sweet first-run major motion picture agreements with giants such as Disney (DIS) .

But Wall Street doesn't care about this. It didn't in 2011. And it won't in 2013.

Netflix didn't crash in 2011 and waddle through 2012 because of the problems inherent in its business model. It went through these problems because of what became known as "Reed Hastings' missteps."