Netflix Inc (NFLX) came out with earnings after the close and expectations seem to have disappointed. Netflix had a strong 1st mover advantage in DVDs, but their dominance in streaming video is far from guaranteed. Content costs are astronomical and many well financed competitors are showing a willingness to pay up for quality programming. While Netlfix is still very strong in the United States they are investing aggressively internationally where they even have less of a competitive advantage. This is worrisome because Netflix does not have the financial strength to blow money, as shown by their stock issuance after the precipitous decline in price last year. While Netflix is much closer to being attractive below $100, it still isn’t at a level where I’d get really interested.
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