A Note From Stephanie Link
And on RealMoney Pro: RealMoney Pro veteran Tim Collins explains his Netflix trade :
Netflix (NFLX) has a major issue. It has little original content, yet does not want to pay up for the content it needs. It's like a moody teenager who wants to borrow the car for a long weekend road trip who refuses to even fill the car with gas.
Worse yet, the teen wants your credit card to use as well during the weekend. Amazon (AMZN) has 33x the market cap, plenty more cash and a currency NFLX does not have (the stock) to use if desired to acquire content and sign deals. That is exactly what AMZN is doing. I won't argue that AMZN is fairly valued or undervalued here, but if they were smart then they would probably use what stock they could to acquire as much content as possible. Toss in the cable companies along with Coinstar (CSTR) and there just seems like very little reason to own NFLX right here. And for those arguing a takeover is possible, well of course it is, but I still don't see it happening unless NFLX is in the high $20s or low $30s, so it can get some sort of "premium." I say that word loosely since that price is a long fall from where NFLX currently sits. ( Continued)
-- Stephanie Link