Netflix stock: defeated by K.O.
27 April 2022
Value of the company last November: $300 billion
Value of the company today: $85 billion
An exceptional drop of 70%.
Could we have anticipated this? Many indications are in favor of a "yes".
- As early as 2020, the results indicate that Netflix has sold out in the US and Canada, its main market.
- At the back, the pack of Disney Plus, Amazon Prime Video and others are pushing hard and want their piece of the pie.
- On the content side, Netflix is stuck: tens of billions of dollars are spent on adding series and movies to the platform every year. The goal: to keep its customers.
And yet, at the same time, buyers value Netflix 120 times what it generates in cash.
Typical example of a beautiful asset, very badly valued.
Already partially done in January (-22% following the annual results), the awakening is therefore violent for the shareholders who see their share price drop by 35% on the session of last Wednesday.
Growth came to an abrupt halt in the first quarter. And a downward trend is emerging. Result: $70 billion have been lost in 1 week.
The stock is finally approaching a justifiable price.
Enough to take a closer look at the case.
To be continued...
Have a great week,
Pierre
Disclaimer
This presentation is a promotional document. The content of this document is communicated by and is the property of Monocle Asset Management. Monocle Asset Management is a portfolio management company approved by the Autorité des Marchés Financiers under number GP-20000040 and registered with the ORIAS as an insurance broker under number 10058146. No information contained in this document should be construed as having any contractual value. This document is produced for information purposes only. The prospects mentioned are subject to change and do not constitute a commitment or a guarantee. Access to the products and services presented here may be subject to restrictions for certain persons or countries. Tax treatment depends on individual circumstances. The fund mentioned in this document (Monocle Fund SICAV) is authorized for marketing in France and possibly in other countries where the law permits. Before making any investment, it is advisable to check whether the investor is legally entitled to subscribe to the fund. The risks, costs and recommended investment period of the funds presented are described in the KIDD (key investor information documents) and the prospectus, available free of charge from Monocle Asset Management and on the website. The KIDD must be given to the subscribers before the subscription. Past performances are not a reliable indicator of future performances. Monocle Asset Management cannot be held responsible for any decision taken or not taken on the basis of information contained in this document, nor for the use that could be made by a third party. The investor may lose all or part of the amount of capital invested, as the funds are not capital guaranteed.
To unsubscribe or for any information request, you can email us at monocle@monocle.lu
