GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Baron Funds Comments on Netflix Inc.

August 24, 2012 | About:
Holly LaFon

Holly LaFon

249 followers
From Baron Funds' second quarter commentary:

Netflix, Inc. (NFLX) operates the leading streaming video subscription service, offering movies and TV shows to 24 million domestic subscribers for $8 per month. Netflix continues to rapidly grow its subscriber base, as it offers the widest selection of TV and movie programming on the largest array of televisions and other devices among all streaming providers. This scale advantage allows Netflix to invest more for its programming, which then appeals to a larger subscriber base, allowing it to invest more for its programming creating a virtuous cycle. Netflix's business model is similar to that of HBO and other premium pay TV networks and, at scale, Netflix's profit potential would be considerable. Netflix is rapidly approaching HBO's scale in the U.S., and has a similarly large opportunity, in our view, outside of the U.S., a business that Netflix is just beginning to develop. Following a rare management misstep last year, Netflix shares have been volatile, having fallen as much as 80% from their highs. We have established a position to take advantage of this meaningful correction in the shares, as we believe the opportunity for Netflix remains intact. (Rich Rosenstein)

Rating: 2.7/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide