Quote:
Originally Posted by OLD BOY
It is fair enough to point to the huge debt that Netflix has, and continues to accrue. But to be so cock sure that they will never come out of the other side shows a lack of flexibility of thought on your part.
Whilst I cannot rule out that Netflix could fail in the end, nor can you rule out that they may well succeed.
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One of the most perennially amusing things about all the streaming threads on Cable Forum is your tendency to see inflexibility in people who simply challenge your own, famously inflexible opinions.
Nobody else here is ruling anything out - they are, however, making a better fist of weighing probable outcomes than you appear to be.
I tend to agree with those who believe that ultimately Netflix’s debt pile will be too great to sustain. Its market cap at the moment is around $140 billion which is ludicrous, and more than a little reminiscent of the dotcom bubble, with its tendency to value companies on their future earnings potential rather than their track record. Its debt, at $12 billion, may be only a fraction of its market cap at the moment but if there’s a sudden correction in the share price that could change quickly.
There is undoubtedly value in the business but that just makes it a takeover target once it is valued appropriately. Don’t imagine for a second that a larger, well established media company wouldn’t snap it up should the price be right. I think the chances of the Netflix brand surviving to 2035 are very slim. Its content, and its subscriber base - which at the end of the day is all that stands behind the logo - will in time be merged into something bigger.