Netflix

[Grieve]

I just bought a $160/$170 Jan 2011 call spread. Cost me 500 bucks, but will pay out $2000 if the stock is back over $170 by then. Break even at about $165.

The sell-off is insane. Five days ago the stock was at $210. Two months ago it was over $300. So from $300 to $131 because some of their unprofitable DVD-by mail subscribers are bailing? Crazy.

Bear in mind "the smartest guys in the room" Goldman Sacks have a buy rating and $270 price target on the stock, which they just updated yesterday. Here's what they said:

http://www.streetinsider.com/Analyst+Com...94585.html

They are basically echoing what I said - sure it's easy to find stuff on your computer, but the average person doesn't want to watch movies and TV on their computer...they want it on their TV. Netflix are way ahead of anyone else in that area.

Starz isn't that big a deal - it's about 8% of their content. They are now making deals directly with the broadcast networks and movie studios. And they money they didn't pay Starz is now freed up to buy content elsewhere. Plus they are about to expand into Europe...