Big investor news on a battleground stock! Bearish sentiment and jitters concerning missed M&A opportunities, coupled with concerns over viewer engagement have weighed on Netflix near term. Does Ackman’s new position change the equation? Where does our value investor community fall on this news? I look forward to your input.
Here’s my take, concerns over engagement and missed M&A opportunities are misplaced. Netflix’s management team has remained discipline while driving up acquisitions costs for competitors like paramount. Netflix’s new ad revenue, along with AI enhancements and new offerings like video games and live sports, offers increased value to consumers at a competitive price point. Ad revenue should continue to increase, AI should drive down some production costs and reduce viewer selection friction by filtering its large catalogue. New video game offerings and live tv make Netflix a cheap, one stop shop, for price conscious families and cash strapped viewers. Netflix also maintains a unique international content and reach, giving it, at least in some sense, a larger TAM than its competitors. As long as Netflix continues its disciplined fiscal approach, why shouldn’t the stock continue to grow?
Input from both bulls and bears are highly appreciated. I look forward to your input.
