Technology Stocks
Netflix (NFLX)
An SI Board Since May 2002
Posts SubjectMarks Bans Symbol
1489 137 0 NFLX
Emcee:  Glenn Petersen 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 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 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 Netflix originally filed to raise $86.3 million through Deutsche Bank in April 2000 , but the offering was withdrawn three months later as the IPO market began its long, dry period, one that still exists.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

Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
ReplyMessage PreviewFromRecsPosted
1489Haha, that would have been outrageous indeed. As for the the trailer, people areIntelim-last Friday
1488 People seem to be outraged by Netflix's latest show "Dear White PeopleJurgis Bekepuris-February 15
1487People seem to be outraged by Netflix's latest show "Dear White People&Intelim-February 15
1486ATH 144.78, continuing breakout 144.92 145.07Sr K-February 8
1485YouTube And Netflix Are Altering The Media Landscape seekingalpha.comKrigannie-February 8
1484All-time high 144.28 +3.03 (2.15%) Close 144.00 Volume 8.5m EU moves closer Sr K-February 7
1483Netflix Should Stay Out Of China seekingalpha.comKrigannie-February 5
1482Just finished it, kinda liked it but not in awe. Neil Patrick Harris was great tIntelim-January 30
1481Daniel Handler was the guest yesterday on Wait Wait … Don't Tell Me! A tie-Sr K1January 22
1480So this is when I binge watch all previous seasons. Sssweet!Intelim-January 21
14794 Reasons I Prefer Disney Over Netflix seekingalpha.comKrigannie-January 20
1478 What do you do when you don't like how the table is set? House of Cards wKrigannie-January 20
1477International subscriber growth is the most important metric here imho. And oh bIntelim-January 19
14765 Key Takeaways From Netflix's Terrific Q4 Earnings Report investors.comJakeStraw-January 19
1475Longs don't care about anything else other than’s the breadmore100-January 19
1474Netflix Releases Fourth-Quarter 2016 Financial Results The stJakeStraw-January 18
1473Jerry Seinfeld inks production deal with Netflix, brings over 'Comedians in Sr K-January 18
1472Holy crap batman - .30 would be a blow out. Stay calm, stay calm. :-)d[-_-]b-January 15
1471IN THE NEWS: NFLX "Whisper Number" .30drmicrocap-January 15
1470Netflix also apparently produces animes so I'm not surprised.Intelim-January 14
1469All-time high 133.93, about 15 minutes before the close. Volume 10.502 million.Sr K-January 13
1468Just saw this on on YouTube [youtube video] Wow. Netflix now produces these PixKrigannie-January 13
1467Saw most of them, the rest is on my radar! Good compilation.Intelim-January 10
1466I can already see profit-taking take place this week and stock falling down backKrigannie-January 10
1465Netflix: Here Comes The Tipping Point seekingalpha.comKrigannie-January 6
Previous 25 | Next 25 | View Recent | Post Message
Go to reply# or date (mm/dd/yy):
Copyright © 1995-2017 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.