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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 Netflix originally filed to raise $86.3 million through Deutsche Bank in April 2000 , but the offering was withdrawn three months later as the IPO market began its long, dry period, one that still exists.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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1338Netflix could be forced to spend up to 26% of its French revenue bankrolling EurTimF-last Thursday
1337Short 102.40 put in 2000 shares filled 1000. Can't believe they gave me thatmore100-last Thursday
1336Bulls get another strong day and so far nothing suggests it will reverse before more100-last Tuesday
1335Will the market help the bulls to prove they can take the price at the breakout more100-last Monday
1334Still amazes me how no one wanted this stock at $10 in the yr. 2012, yet so manymore100-May 17
1333I can understand people being irritated by the 'region locks'. If they rIntelim-April 26
1332Netflix CEO Says Annoyed VPN Users Are 'Inconsequential' from the you-meTimF2April 26
1331Is $NFLX becoming the 2016 short play of the year??? That would not be cool at amore100-April 26
1330I completely agree with you on that. First they need to analyze the market, see Intelim-April 20
1329Glad to see NFLX is going international. That is the natural next step with theIIYL-April 20
1328TO all those who jumped to buy netflix yesterday ah. always and always follow thmore100-April 20
1327You're right about that, of course. My point was only that that so many foreJ.F. Sebastian1April 19
1326I think we should be looking at Europe and rich Asian countries here in the firsIntelim1April 19
1325Netflix beats 1Q profit forecastsNetflix tops 1Q net income expectations, missesdrmicrocap-April 19
1324HM data shows institutional investors have 82% ownership & hedge funds trackmore100-April 19
1323My concern is on content spend vs. bottom line performance. Metrics were meteorThe Ox1April 18
1322I'm concerned about how NFLX adapts to local markets abroad. Obviously peopJ.F. Sebastian-April 18
1321I'm concerned about how NFLX adapts to local markets abroad. Obviously peoplIntelim-April 18
1320Considering Netflix has newly expanded into many more foreign countries in the lJ.F. Sebastian1April 17
1319The odds don't look too bad. Let's see how it goes.Intelim-April 15
1318Option market predicting 10% move either side but give 15% downside and $13% upsmore100-April 15
1317Netflix is getting ready for lift off! Let's see if they run this up into eamore100-April 11
1316107.1 - 107.3 max upside possible today (tho' likely to struggle with 105). SybilNicolas-March 30
13151st sign of positive price action but not out of the woods yet. [graphic]more100-March 30
1314broke channel, bear trapped, regained channel. SybilNicolas-March 29
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