Monday screencast: Netflix as battleground

abnormalreturns
December 20th, 2010

Netflix has not been a stranger to this series of screencasts. Netflix in 2010 has been the epitome of a momentum stock. Given its strong price performance it has not surprisingly attracted some dissenters including prominent value investor Whitney Tilson. What is really interesting this morning is that Netflix CEO Reed Hasting has responded to Tilson’s short sale argument at all. While this development is fascinating we are unlikely to see a wave of short seller-CEO back-and-forths. In part because the legal risks (and costs) facing a company that wants to respond in a public fashion. In any event, this development firmly places Netflix in the category of battleground stocks. In today’s screencast we look at this interesting sequence of events for Netflix.

Items mentioned in the above screencast:

Whitney Tilson on why he is short Netflix. (SA)

Netflix CEO Reed Hastings with some reasons why Whitney Tilson should cover his short. (SA)

On the value of Netflix content to its subscribers. (Kid Dynamite)

Why shorting is so difficult. (Gannon on Investing)

When a CEO responds to short-seller in a rational manner is news. (IR Web Report)

Daily chart of Netflix (NFLX). (Finviz)

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Tickers: NFLX