Bill Ackman loses $400M dumps entire Netflix stake after just 3 months
businessinsider.com
businessinsider.com
Anyone can see that the other players have caught up, and their brand does not seem to have that pull anymore, especially when paired against the likes of Disney, Marvel, DC, HBO, etc.
Their content has a lot more competition, and the pandemic has altered the dynamics of streaming.
I guess most households have at least a couple of streaming subscriptions if not more, and dropping off NF is easier, especially against rising prices and restrictions on sharing.
Now, they have to fight head on with the big studios who have a whole ecosystem with them.
I frankly wonder why anyone would invest in NF at this juncture. I would expect subscriber growth to taper off, and their pricing flexibility is limited due to competition. Also, price sensitivity for streaming seems to be particularly high, perhaps amplified by social media.
Atleast with the cable TV, you get hundreds of channels. Now, the fatigue of selecting content is very real. Also, the algorithms are crap on NF.
And they're forecasting a loss of 2 million more in Q2, which makes the loss of 200k in Q1 look small.
This is an example where they were ahead of the industry with distribution and now that their competitors have invested in infrastructure/distribution, supply chain (movie/show production takes time), marketing, and have competing products the competition is fierce when your price is the highest.
Now replace Netflix with Tesla and this could be the same case in the automobile market in a 3-5 year span. Market leader because they lead the industry in one element but once that tech (batteries/EV/charging network) is commoditized, the market leader could suffer.
Netflix was in a new market. No one had serious streaming. They had content, but didn’t use the internet to sell it. They borrowed content and did the stream thing. The “moat” was “could NBC etc figure out how to put pictures on the internet”. The answer is apparently yes, and then they yanked their content back. Now Netflix has to reproduce Disney / marvel / all the bug content makers to compete.
Tesla is much more an established market. Yes battery car is new. But ford etc have huge huge legacy commitments. A culture of outsourcing. Software as a frill not a core feature. A legacy method of distribution (dealers). Ford can’t just drop their dealers network.ford can’t just fire their pension obligations. They are very much “stuck” in their direction.
If Tesla is topped, I very much expect it to come form a rival startup and not legacy auto. 12 years in and I see no signs the legacy automakers are doing the right things. Still no OTA updates with regular frequency. You still have to argue with dealer over price and deal with scummery.
It is quite childish to insist that someone who questions the value of Tesla must put their money on it. It’s akin to lame-ass playground bullying: “You don’t like that, so I dare you to eat it!”
Setting up an account with a broker to do options trading requires a lot more capital or margin and requires a lot of research to understand puts/calls, hedges, etc. Buying stocks of other companies you believe will grow is a perfectly fine approach.
One can have an opinion about a company and not do anything with the stock. One can also have opinions about laws, political candidates and ice cream flavors and not do anything about them as well (at least in the US, other countries may silence political opinions).
If they built a lower range, no frills, compact commuter car with lower margins (their margins are insane - like 20%+) and higher quantity produced they would end up so far ahead of anyone else because they could be in that market segment now-ish. The traditional car companies are probably 1-3 years away from mass producing EVs, maybe longer. How many households have a primary "family car" and a secondary commuter/small trip car? That 2nd car could easily be an EV with a smaller range (200mi). Its a much larger market segment than luxury.
If Tesla just sticks to luxury segment, their story could be similar to Netflix or maybe close to the betamax vs VHS story (betamax was better technically but lost).
Nobody chooses their streaming service based on the image it projects. Tesla "won" some demographics and that's gonna be hard to shake.
(As an example, I was grandfathered in to Google Music's two-dollar-cheaper plan for a few years, and that alone was the only reason I continued paying for Google Music).
I would not be surprised to see a netflix remake of the original movie just like that. Perhaps the main character would also have a more "diverse" sexual orientation. It's really that all the movies I've watched recently on netflix play the same note. They seem to produce movies just to tick some boxes.
With people having been stuck indoors for the past two years it's unsurprising that formulaic, poorly-written, message-driven content isn't keeping them in front of their screens.
How'd that biz strategy meeting go? You're getting crowded out of the market for your core biz. So you decide to enter a more crowded, more competitive market, for which you have no history or culture.
Grow or die, right? Too bad there's not an option for "That was a fun ride. Thanks everyone. We're switching from being a growth stock to paying dividends."
I have experimented with just buying movies on Google Play and Amazon Prime, and a few series on Apple TV. If it was just me in our household, I would go this route.
I have recently retired and I expected to spend more time watching streaming content but the opposite has happened. I find reading, walking, or sitting outside feels like a better use of my time.
EDIT: if people pay for Amazon Prime for the shipping, then just using Prime content augmented with buying content otherwise unavailable seems like a good plan.
To be perfectly fair, this level of volatility is not even seen in BTC anymore, wow! You have to go to the super leveraged exit scam alts to see a 62% drop.
For all this talk about stability being critical to the health of the established markets, this really is egg on the face when a FAANG has taken such losses on a service which they have this much market-share on in comparison to the rest of the Industry.
Netflix's share price peaked in November 2021 and is about 62% lower year-to-date.
Every subscriber Netflix loses is a direct loss of revenue with little to no change in operating costs.
FANNG is not stable. Crypto is all bespoke/custom so it depends.
Commodities are stable. Nonproductive assets are stable. Think about it like you’re bidding on future expected cash flows. The range of cash flow estimates is enormous for FANNG.
This feels like a rookie mistake.