I believe that investors have assumed that this increase in price will have a negative affect on the company. However, I believe it was a necessary change and that it will result in the company exceeding expectations on Monday. The company announced on September 15 that it was expecting to end the third quarter with 24 million subscribers which is only 1 million less than it expected before the price increase was implemented. The issue will be the percentage of subscribers that are receiving both services versus one service. If a high number of subscribers, 85%, are only using one service then earnings will be a huge disappointment. But if the margins are closer to 70/30, then earnings could be exceptional for the investor who takes advantage of the current price before earnings are announced.
Netflix doesn't need a high percentage of subscribers that use both services, I believe 30% will suffice, to beat expectations. Margins should be much better since the company is mailing out fewer DVD's and should have fewer lost products along with less expenses from the cost of stamps. I am taking advantage of the stocks position because if it were to exceed expectations then it could easily double as quickly as it fell.
I am investing $7,500 of my "pretend" $50,820 becase although I am confident it will exceed expectations, I also believe there are several additional good stocks with much less negative publicity. And if this stock were to post exceptional numbers it would rise over the next several weeks and give the investor several opportunities to purchase shares. Therefore, I will place the majority of my money in stocks with a clear picture of the future that lack the questions that Netflix has regarding its future performance. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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