![]() ![]() In reflecting on TCV's investment, Hoag told CNBC there were four main things "we felt really good about that were contrary to conventional wisdom." They were: "When you're being contrarian is when you'll end up with the most exceptional returns, if you're right," said Hoag, who years earlier had to perform the Heimlich maneuver on Hastings at a lunch meeting. ![]() With the stock now trading at over $336, TCV's current stake is worth about $1.66 billion, and that's after selling a big chunk of its shares in the years since the investment. On a split-adjusted basis, TCV acquired more than 16 million shares at $12.26 apiece. Hoag's firm, Technology Crossover Ventures, pumped in $200 million in exchange for convertible notes. Jay Hoag, a Netflix board member and early backer, co-led the late 2011 financing. In July of that year, Hastings raised the price of monthly memberships by splitting DVDs and streaming into separate subscriptions, and then in September announced plans to renamed the DVD unit Qwikster.Ĭustomers fled and the stock plunged 75% in four months, forcing Netflix to backtrack on the spinoff and then raise $400 million in emergency funding. Crises have been very real, none more so than what became known as the Qwikster debacle in 2011. Netflix permabear Michael Pachter of Wedbush Securities repeatedly calls the company's valuation "unwarranted," and warns clients of ongoing cash burn and "content migration to competing services."Įxistential threats aren't just hypothetical scenarios for Netflix. Furthermore, the ballooning roster of cash-rich competitors, ranging from Apple to Disney, is forcing Netflix to spend more on movies and TV shows to keep customers from canceling their membership. The company runs on a thin - sometimes razor-thin - operating margin and has negative free cash flow, a reflection of how much it costs to buy and invest in the kinds of entertainment consumers want to watch. The stock's meteoric rise has always perplexed those investors who concern themselves with fundamental financial metrics like profit and cash. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |