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Netflix (NFLX)
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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 Netflix originally filed to raise $86.3 million through Deutsche Bank in April 2000 , but the offering was withdrawn three months later as the IPO market began its long, dry period, one that still exists.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.
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1383Mid October I believe. Looking into that as well.Intelim-yesterday
1382When are next earnings? Always a great opportunity for puts. Krigannie-yesterday
1381I'd say my outlook on Netflix's future is positive but to a lesser extenIntelim1Tuesday
1380Agree. I see Netflix growing revenues 20% a year for the next 5 years (conservatValueInvestor151Monday
1379keeping and eye out on this. I will buy this very soon. Before earnings for suremore100-Monday
1378Probably will be swinging between 94 and 95 next week. Krigannie-last Thursday
1377Interesting... Putting it on hold for the time being.Intelim-last Thursday
1376Here's a reason why NFLX is falling today thestreet.comKrigannie1September 21
1375You and me both.Krigannie-September 21
1374Which happens to be quite good! This is why I'm quite positive about NFLXIntelim-September 20
1373NFLX's long term value will be the based solely on their original contentKrigannie1September 20
1372Yeah, I agree. "Some" is also a relative measurement. But we will see Intelim-September 19
1371This is going to be another pop at the bell to 100 before opening puts back to 9Krigannie-September 18
1370Of course they are not going to overthrow the king. But taking some of its markeKrigannie-September 15
1369Doesn't sound very threatening, to be honest. Although Vodafone does have a Intelim-September 15
1368More competition is coming telegraph.co.ukKrigannie-September 14
1367At some point it might be that all major telecom companies include Netflix in thIntelim-September 14
1366Liberty Global to offer Netflix to all customers Reuters September 15, 2016 AGlenn Petersen2September 14
1365Oh wow, this is one useful extension! It's bit weird it wasn't included Intelim-September 7
1364How to add a 'find a random movie' button to Netflix finance.yahoo.comJakeStraw1September 7
1363Netflix: Time to Sell as Pricey Stock Hits Real Competition, Says Axiom blogs.baJakeStraw-August 30
1362Looks ready. $99 gets 101.50 and then $104 and possibly 108. There has been a chmore100-August 29
1361This is going to move sideways today. MM will manipulate to where they want it. more100-August 19
1360Watch this trend line for a upside break at $97 for short-term direction. [grapmore100-August 18
1359finance.yahoo.com Netflix Expands Hospitality Offering Through Expanded Enseo ASr K-August 17
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