SI
SI
discoversearch

Technology Stocks
Netflix (NFLX)
An SI Board Since May 2002
Posts SubjectMarks Bans Symbol
1137 111 0 NFLX
Emcee:  RockyBalboa Type:  Unmoderated
Investors Snap Up Shares of Netflix in Initial Nasdaq Trading

NEW YORK -- It's amazing what dropping the "dot-com" from your name can do for an initial public offering.

Netflix Inc. , an online entertainment company that, when known as NetFlix.com had to once cancel its IPO, opened higher initial trading Thursday.

Shares of the Los Gatos, Calif. , company opened on the Nasdaq Stock Market at $16.19, 7.9% above the $15 price set on its IPO of 5.5 million shares. Near midday, the shares traded even higher at $16.95.

The offering, led by Merrill Lynch & Co . Inc. (MER), priced at the high end of price talk of $13 to $15 a share, an unusually aggressive pricing in what has been a tough market for unprofitable technology IPO hopefuls.

"To price at the top of the range, we were very fortunate," said Reed Hastings, the company's chief executive, in an interview.

Netflix is the country's best-known online entertainment subscription site, allowing users to rent three DVDs a month for a monthly subscription charge of $ 19.95.

One of Netflix's biggest advantages is its subscription model, said George Nichols, an analyst with Morningstar.com in Chicago .

"These ongoing billing relationships, rather than one-time purchases, have annuity-like characteristics that provide a steady revenue stream," he said.

It also has some growth trends in its favor, Mr. Nichols said. "As far as consumer technologies go, DVD is still relatively young, and many new DVD players are being sold as the mass market fully adopts it."

The business isn't yet profitable, though the company has been narrowing its losses. In the first quarter, Netflix logged $30.5 million in revenue, for a $ 4.5 million net loss. In the comparable period in 2001, it lost $20.6 million on $17.1 million in revenue.

For Netflix, the offering marked a success after failing to come to market two years ago. Netflix originally filed to raise $86.3 million through Deutsche Bank in April 2000 , but the offering was withdrawn three months later as the IPO market began its long, dry period, one that still exists.

The offering was revived in March of this year, but with new terms. The company filed to sell as much as $115 million through Merrill Lynch, though, in the end, the offering raised $82.5 million.

Netflix's Mr. Hastings said he believes that the proceeds now will "give pause to our competitors" and allow the company to more aggressively market its services free to potential customers. Nine of 10 people who receive Netflix free initially end up subscribing, he said.

The challenge to the business is twofold, Mr. Hastings said. Blockbuster Inc. (BBI) recently said it would get into the mail-rental business, putting it into direct competition with Netflix.

The other, Mr. Hastings said, was getting people to feel comfortable renting DVDs online and receiving them through the mail, a process that "just sounds odd to people until they try it," he said.

Netflix featured one of the odder risks to its business in the offering documents filed with the Securities and Exchange Commission: the U.S. Postal Service. If the Postal Service does indeed raise rates this summer, it "will adversely affect our gross profit if we elect not to raise our subscription rates to offset the decrease."

Customer satisfaction might also take a hit if the Post Office stops Saturday delivery and customers can't get their DVDs in a timely fashion, Netflix said.
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
ReplyMessage PreviewFromRecsPosted
1137That's why I posted the WSJ Correction and Amplification. Sr K-Sunday
1136Closer to $2 billion: Icahn Exits Netflix With Profit of at Least $1.6 Billion Glenn Petersen-Sunday
1135>> $2 million A very small number for Carl Icahn.Julius Wong-last Friday
1134on WSJ Corrections & Amplifications June 26, 2015 Carl Icahn made more tSr K-last Friday
1133 Carl Icahn tweeted he sold the last of the Netflix shares he owned MARKETWATCHSr K-June 24
1132Stock is rallying after hours on the news, currently up $17+ per share, to $700.J.F. Sebastian-June 23
1131Netflix (NFLX) Announces 7-for-1 Stock Split Netflix, Inc. (Nasdaq: NFLX) annouJ.F. Sebastian1June 23
1130Without quantifying the amount of money or ads, it would be hard to draw a meaniFUBHO-June 19
112979% of Office 365 subscribers would rather pay more for Windows 10 than see ads,Sr K-June 18
112879% of Netflix subscribers would rather pay more than see ads, says poll by RobTimF-June 18
11277 Deadly Sins: Where Hollywood is Wrong about the Future of TV Monday, May 25, 2TimF-June 15
1126Q2 report 7/15/2015 is about 5 days before previously expected. LOS GATOS, CaliSr K-June 12
1125NFLX - GONZA!J.B.C.-June 10
1124Another new ATH, 637.92 a few seconds ago. Higher now, 638.40. 639.37 640.90 Sr K1June 9
1123Report: 'Top Gear' trio headed to Netflix businessinsider.comDanD2June 8
1122Comcast doesn't make the boxes themselves I don't believe, they purchaseJ.F. Sebastian-June 8
1121There is simply no way the box has more than a few hundred dollars of componentsFUBHO-June 8
1120It's ridiculous because Comcast charges an extra fee for EACH cable box withJ.F. Sebastian-June 8
1119I refuse to pay Comcast extra for HD TV. Our cable/internet bill is already $15FUBHO-June 6
1118Netflix to Stream Into Italy, Spain and Portugal in October Todd Spangler NY DiGlenn Petersen1June 6
1117ATH 633.78. close 633.22Sr K1June 5
1116 U.S. Netflix Subscribers See Only Half of Netflix Total Streaming Catalog By TimF2June 5
1115Marriott Hotels Add Netflix, Hulu Plus, Crackle, and YouTube to Their TVs cordcuTimF-June 5
11141.4 million U.S. TV homes Cut the Cord in 2014, bringing the estimate of U. S. TTimF2June 5
1113What's New on Netflix: Advertisements Netflix is experimenting with advertiTimF-June 5
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
Copyright © 1995-2015 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.