To say that Netflix, Inc. (NASDAQ:NFLX) has had a banner start to 2013, risks understatement of the highest order. While 2012 was spent recouping the losses incurred at the end of 2011, owning to a monumental mistake in subscription offering, 2013 appears to be the year when Netflix returns to its position as a Wall Street Darling. Following a Q4 earnings report that blew away most analysts’ predictions, in the third week in January, Netflix, Inc. (NASDAQ:NFLX) has been a company on a serious upward trajectory. Netflix began the year trading below the $95 mark, has since hit a high of $185; it has is enjoying rave reviews from its foray into producing its own programming.
Unfortunately, for this growing giant of on-demand programming, they were unable to wrap up Sony Corporation (NYSE:SNE) (TYO:6758) Pictures as they did with Disney last December. Granted Disney was more important as Netflix, Inc. (NASDAQ:NFLX) has a great reputation as a child pacifier; a simple investment in a tablet a $7.99 monthly fee and your child is quiet both at home and in the car.
Earlier this month, value investor Mohnish Pabrai took part in a Q&A session with William & Mary College students. Q3 2021 hedge fund letters, conferences and more Throughout the discussion, the hedge fund manager covered a range of topics, talking about his thoughts on valuation models, the key lessons every investor should know, and how Read More
The announcement that Netflix locked up Disney programming beginning in 2016, was greeted by a 16 percent rise in its stock price. This was a huge single-day gain given the notoriously fickle nature of Netflix investors. The Disney deal also came within a year of Netflix being unable to reach an accord with Starz on a contract to continue offering its programming.
That inability to hammer out a deal in 2011, may come back to haunt Netflix, Inc. (NASDAQ:NFLX) as it was Starz (NASDAQ:STRZA) (NASDAQ:LSTZA) today who announced that they had signed a five-year extension on their exclusive deal for the airing of Sony Pictures’ offerings.
“Starz (NASDAQ:STRZA) (NASDAQ:LSTZA) has been a terrific partner and we are excited to be extending our relationship with them through the 2021 slate,” said John Weiser, President, U.S. distribution for Sony Pictures Television.
While this is probably not going to take a huge bite out of Netflix, Inc. (NASDAQ:NFLX) or its investors’ confidence, it does beg a few questions given CEO Reed Hastings words during an earnings call last month when he suggested his interest in Sony Corporation (NYSE:SNE) (TYO:6758) was, “just like it was for Disney. It’s strong.”
Hastings followed with, “We’re interested. We’ll see how it works out.” Not well, Mr. Hastings, not well.
All that said, since Netflix’s release of “House of Cards” on Feb. 1st this writer has devoured all 13 episodes and eagerly awaits the second season, presently in production, considerably more than a Sony Pictures film I can find elsewhere.
Shares of Netflix, Inc. (NASDAQ:NFLX) are down from last week’s high of 185.75 and are trading in today’s afternoon activity around $177, down just more than 2%.