Netflix A Bargain at $77

The stock price collapse at Netflix (NYSE:NFLX) is creating an opportunity in the market.  For those investors that are bailing out now, they are way underestimating the lead Netflix has.  This isn’t an airline stock or some other company in a commodity business.  This is Netflix.

Years ago when I owned a company that sold and installed DIRECTV (NYSE:DTV) I shunned Netflix simply because it didn’t make me any money.  One day I found a Netflix wrapper hidden in the couch like children hide candy wrappers.  It turns out my wife signed us up for the DVD service and worked out a deal with my assistant so I never saw the discs.

You have to keep in mind that as a DIRECTV dealer we had every possible channel they offered.  DIRECTV on demand movies were $4.99 each, and I paid the bill.  We also had aRequest Movie server with over 300 DVD’s loaded.  I thought my house was entertainment Mecca and yet my wife still wanted to get a Netflix account.

Today my life is very different, I sold the house with the multi room entertainment system, the Request Movie and Music Server was sold with the house.  The one thing that came with my was my Netflix account.  My parents have one, even my inlaws have one.

In the 1970’s and 1980’s, Netflix was really a dream of Bell Systems and IBM.  I once saw  an IBM introduction video that talked about rooms of IBM computers serving up Television shows, and even movies on demand over telephone lines.  The break up of the Bell Systems ended that plan.  Today that is what NetFlix essentially does.

In my new home I have three LED flat panel energy star TV’s.  In fact I am using one as a monitor for my computer as I write this.  All of them have built in Netflix capability.  I have the iPad ap and the iPhone ap.  I like that I could choose a better iPhone ap too.

A little bump in the road because the CEO decided to let the markets know the future isn’t a reason for a 36% slip in the value of the company today nor a 70% slide off the peak.  Netflix still has a commanding lead in the on demand markets and offers a technology that prevents piracy.  Netflix delivers what its customers really want, on demand and inexpensive entertainment.  Netflix also delivers what studios want, a way to deliver and take back content so it can’t be resold without them getting a cut.

The problem with news from Wall Street and sources like CNET is that the news is all about the “now” and has nothing to do with where the consumer markets are really going.  It is clear that the investors that bailed are simply gamblers that go with the flow to make a buck without knowing or caring what is really going on.  Netflix is everywhere and it isn’t going away anytime soon.

At todays price of about $78, way off the peak of $304 and 36% off of yesterdays $120, Netflix looks like a fair buy if you can weather the storm of baloney from Wall Street and everyone else that wants to take a poke at a company that delivers, especially when they deliver on demand.  And in the interest in full disclosure, yes I bought some.  Why trust an analyst that says buy and doesn’t?