Watchlist: NFLX, SIRI, GOOG, YHOO, AMZN
I was watching PBS and saw an interview with the CEO of Netflix, Reed Hastings. Hastings innovates through the use of technology. Netflix is very innovative – having introduced online dvd rental – and Reed Hastings has plans for the future of movie distribution through TVs hooked up to the internet. We see the beginnings with on demand, but in a few years we will see greater integration, features, delivery, and choice for what you want to see when you want to see it. Netflix is poised to lead that new market, as it leads the online DVD rental market now.
Netflix added 1.5 million subscribers in 2005 for a total of 4.1 million. Rival Blockbuster, late to the game, is suffering from lack of new subscribers, virtually stagnating at 1 million. Netflix service starts at $9.99 per month. Current market cap is $1.5 billion. They’re sitting on $180 million in cash, and interestingly they have virtually no debt. Current price is 26.98. I would like to get in on a dip around the support area of 25. My target sell price is 30 – 32.