Been psychologically short $NFLX for years — vindicated in 2025, but too chicken to actually short or buy puts 😂
The bear case was always about content spend. They can't justify growth without massive hits, and those hits have faded. That kills the subscriber and ad growth needed to support a premium multiple. YouTube's creator economy was another headwind — how do you compete with an algorithm-driven platform that doesn't need to spend billions on content? The pivots into live sports, podcasting, and flirting with Warner Bros felt like distractions from the real problem: no Squid Game-level cultural moment to drive real growth.
But here's the turn: at some point, cheap is cheap. Valuation is at a 5-year low. They're buying back stock aggressively. The moat is real — high barriers to entry, global scale, brand recognition. The question is whether the market is finally pricing in a slower-growth, cash-return story instead of waiting for the next mega-hit.
I don't see how they get back to explosive growth without another Squid Game. All the ads, NFL deals, and gaming experiments won't excite the Street without a cultural catalyst. But maybe the margin of safety is wide enough now that the moat gets properly discounted.
Are you buying the dip? $NFLX -5%
The bear case was always about content spend. They can't justify growth without massive hits, and those hits have faded. That kills the subscriber and ad growth needed to support a premium multiple. YouTube's creator economy was another headwind — how do you compete with an algorithm-driven platform that doesn't need to spend billions on content? The pivots into live sports, podcasting, and flirting with Warner Bros felt like distractions from the real problem: no Squid Game-level cultural moment to drive real growth.
But here's the turn: at some point, cheap is cheap. Valuation is at a 5-year low. They're buying back stock aggressively. The moat is real — high barriers to entry, global scale, brand recognition. The question is whether the market is finally pricing in a slower-growth, cash-return story instead of waiting for the next mega-hit.
I don't see how they get back to explosive growth without another Squid Game. All the ads, NFL deals, and gaming experiments won't excite the Street without a cultural catalyst. But maybe the margin of safety is wide enough now that the moat gets properly discounted.
Are you buying the dip? $NFLX -5%