Cramer Likes Netflix... Not The Stock
NEW YORK ( TheStreet) -- Debra Borchardt: Coinstar (CSTR) has thrown down the gauntlet. They are going to start with an Internet streaming business in movies really going after Netflix (NFLX) . Jim, is this it for Netflix because Moody's (MCO) said, 'Listen, they've downgraded, not too terribly, but it did down grade them.' Said they were stable, but.
Jim: On the air I'm talking with David Faber about Netflix, and how Morgan Stanley (MS) says good things and...
Debra Borchardt: In October they upgraded them.
Jim: Yeah, and Netflix is here to stay and that Disney (DIS) deal says they're here to stay, and it is obvious that we're now getting in a situation where you're going have a lot of options to be able to look at. There's the Verizon (VZ) option. There's the Comcast (CMCSA) on Demand option. There's the Netflix option. There's the iTunes option. I find that it's a crowd market and I'm not as bullish on this group as others. I thought that Rocco Pendola had a really good piece questioning the Netflix, whether he paid more for Netflix, but doesn't Netflix have to pay more for content and have to raise money, and I find that this is a total battleground.
Debra Borchardt: Well, that's the expectation out of it. Netflix is going to have raise capital right now.
Jim: Right. So the stock goes higher and then you start thinking, well maybe Morgan Stanley knows that they need to raise money and they're going to do the secondary,and you get cynical. You get cynical when actually you read the report, and the report just says Netflix is here to stay. It's a very good report.
Debra Borchardt: We love them - now can we be your banker?
Jim: You know, when you go buy a TiVO, on the remote is Netflix. There's a button that says Netflix. That's here to stay. Now TiVO is here to stay, there's one for TiVO. But the difference is that Netflix is loved. It does have a huge number of subscribers.
Debra Borchardt: Loved, but $16 a month versus $8 a month, and I know that Redbox doesn't have...
Jim: Price war.
Debra Borchardt: ...the same amount of movies, but yes, price war.
Jim: No, they don't. Well, don't take away my Netflix.
Debra Borchardt: You're willing to pay $16 a month.
Jim: I love Netflix. I really...I love to buy, watch things. I'm a binge viewer just like Reed Hastings talked about. I like to watch five hours in a row, watch with my kids and Netflix is instrumental. They always say, 'Dad, why are you using anything other than Netflix?'
Debra Borchardt: It sound like then you expect that Netflix will probably take a beating for a short-term, maybe then?