Go Back  DVD Talk Forum > Shopping Discussions > Store Forum
Reload this Page >

Netflix IPO -- It's all over now

Store Forum Share Your Shopping Experiences at Stores both Online and Off.

Netflix IPO -- It's all over now

Old 03-08-02, 01:39 PM
  #1  
DVD Talk Hero
Thread Starter
 
Abob Teff's Avatar
 
Join Date: Aug 1999
Location: Not necessarily Formerly known as Solid Snake
Posts: 28,843
Received 1,187 Likes on 814 Posts
Netflix IPO -- It's all over now

http://www.hive4media.com/index.cfm?sec_id=2

Netflix has again filed for an IPO for stock in their company. I have long contended that IPOs and turning a private company into a public one begins the downward spiral. No longer does the company answer to the customer, just the stockholder.

Old 03-08-02, 01:56 PM
  #2  
Cool New Member
 
Join Date: Aug 2001
Location: Brooklyn, Ny
Posts: 37
Likes: 0
Received 0 Likes on 0 Posts
2 dif . things

You are incorrect in you assumptions. When the public company's customer or any other service deteriorates it results in lost revenue. Then the stock market is reacting quickly in punishing the company.

Therefore the conclusion is that the public company has to try hard if not harder to achieve profitability and access to the public investments.

Regards,
Old 03-08-02, 02:28 PM
  #3  
DVD Talk Legend
 
sracer's Avatar
 
Join Date: Feb 2000
Location: Prescott Valley, AZ
Posts: 15,380
Received 58 Likes on 37 Posts
Re: 2 dif . things

Originally posted by Plohish
You are incorrect in you assumptions. When the public company's customer or any other service deteriorates it results in lost revenue. Then the stock market is reacting quickly in punishing the company.
Sorry, but there's a list a few miles long of exceptions to that... so many in fact that it is the exception, not the rule. Revenue is only a part of what stockholders look at. And with creative accounting, lost revenue can be made to look like GOOD news. From IBM down to a one-man self-employed contractor....


Therefore the conclusion is that the public company has to try hard if not harder to achieve profitability and access to the public investments.Regards,
It makes sense theoretically, but in practice, hardly ever true. Amazon lost money for YEARS (did they EVER turn a profit?) but their stock continued to climb.
Old 03-08-02, 06:26 PM
  #4  
Senior Member
 
Join Date: May 2001
Posts: 443
Likes: 0
Received 0 Likes on 0 Posts
Amazon turned a pro-forma profit their last quarter. There still is the huge amt of debt to pay down, but that's true of a lot of companies.

I don't see how they're ever going to go out of business, unless people stop buying over the 'net.
Old 03-08-02, 07:30 PM
  #5  
Member
 
Join Date: Mar 2000
Posts: 73
Likes: 0
Received 0 Likes on 0 Posts
Amazon's So-Called "Profit". Vive Le Euro!

Originally posted by happypants
Amazon turned a pro-forma profit their last quarter. There still is the huge amt of debt to pay down, but that's true of a lot of companies.

I don't see how they're ever going to go out of business, unless people stop buying over the 'net.
Amazon only made a "profit" because of a fluctuation in the value of the Euro as reported here: http://biz.yahoo.com/bw/020124/242316_1.html Amazon admits this and it was in the original nytimes and Financial Times stories about Amazon's fourth quarter "profit".

StockPickReport.Com Announces Investment Opinion: Amazon.Com: ``We Would Have Reported a Fourth Quarter GAAP Net Loss''
SHREVEPORT, La.--(BUSINESS WIRE)--Jan. 24, 2002--Last Thursday, StockPickReport.Com said, ``Today, it is our opinion that Amazon.Com could be on its last legs (in its current form, and current management) before 2003 ends.''

``We stand by our comments of last week,'' says StockPickReport.Com founder, Don Harrold.

``Some investors may ask 'What? Amazon.Com reported a profit this quarter.' And, we say again, 'We stand by our comments of last week.'''

Mr. Harrold continues, ``Remember, we also said, 'Short term, there could be 'volatility' (mainstream wallstreet's euphemism for 'stocks go up, and stocks go down'). But, in our opinion, AMZN is headed DOWN.'''

``The move up in Amazon's stock price over the last few days may be a steep price to pay for retail investors,'' adds Mr. Harrold.

``Amazon Reported in their own quarterly report that, 'Other gains, net were $16 million for the three months ended December 31, 2001, primarily consisting of a foreign-currency gain on 6.875% PEACS. Currency gains and losses arising from the remeasurement of the 6.875% PEACS principal from Euros to U.S. dollars are recorded each quarter. We are unable to forecast the gains or losses associated with our PEACS that will result from fluctuations in foreign exchange rates in future periods. Absent the foreign-currency gain recorded this quarter, we would have reported a fourth quarter 2001 GAAP net loss,''' says Mr. Harrold.


View the report online at:
http://biz.yahoo.com/bw/020122/220044_1.html

``Amazon.Com's OWN QUARTERLY REPORT should, in our opinion, encourage investors to look further into the numbers,'' says Mr. Harrold.

``Amazon.Com's business model may or may not be a subject of debate. What is not in debate is that Amazon's own quarterly report clearly outlines the impetus for their 'operating profit' claims - an unexpected fluctuation in the Euro,'' adds Mr. Harrold.

``The notion that Amazon.Com made a profit with their BUSINESS MODEL last quarter may deserve further investigation,'' concludes Mr. Harrold.

Mr. Harrold continues, ``One analogy investors may find useful is this: You own a hardware store. You owe $1,000,000 to a bank. The interest rate you owe that money at is not fixed, and it drops a quarter point. VOILA! You have more money in your account this month due to the fluctuation in interest owed.''

``As we said in November of 2000, there are so many 'mainstream wallstreet' firms with cash 'tied up' in Amazon.Com stock that, the stock price will probably fluctuate up and down,'' says Mr. Harrold.

``For example, Legg Mason was high on Amazon.Com stock back in November of 2000 (with a STRONG BUY). Ian McDonald (Senior Writer, TheStreet.Com), said on January 22, 2002, 'Legg Mason's funds own some 65 million Amazon shares.'''

``In the same article, David Kathman (Morningstar Amazon analyst) is quoted, 'I've warmed up a bit to Amazon, but they've still got $2 Billion in debt, which is a big thing hanging over them.'''

Mr. Harrold adds, ``'Big thing?' THAT'S an understatement.''

``Long term, we believe the core business model at Amazon.Com continues to be flawed. LOW PRICES as the way to drive profitability ONLINE is a shaky way at best as a means to long term success. Amazon's own quarterly report says that, 'We are unable to forecast the gains or losses associated with our PEACS that will result from fluctuations in foreign exchange rates in future periods.' We don't believe investors should, either,'' says Mr. Harrold.

Mr. Harrold adds, ``Consumers can buy the basically the same items at Barnes and Noble (NYSE:BKS - news; online and real world), Ebay (Nasdaq:EBAY - news), Yahoo (Nasdaq:YHOO - news), (etc) that you can at Amazon.Com. And, it's not hard to CLICK away to get a better deal (MySimon.Com for example).''

On January 17, Mr. Harrold asked, ``Maybe Jeff Bezos never owned a lemonade stand?''

``Today we can imagine Jeff Bezos shouting, 'Vive' Le Euro!''' concludes Mr. Harrold.
Old 03-10-02, 01:26 AM
  #6  
DVD Talk Hero
Thread Starter
 
Abob Teff's Avatar
 
Join Date: Aug 1999
Location: Not necessarily Formerly known as Solid Snake
Posts: 28,843
Received 1,187 Likes on 814 Posts
If I am not mistaken, Amazon always could have shown a profit all along. However, Bezos' strategy is/was to take any and all profit (before it becomes profit) and re-invest it into the company (new technologies, new business areas, etc.). This would allow the company major tax benefits while constantly building and growing. It was never an issue of Amazon actually losing money.

As for investors rewarding a company for good customer service, well, that's the best joke I've heard in a long time! The stock market and customer service are HIGHLY independent of each other. Does Warren Buffet care that Circuit City does not actually have customer service policies? No, he only cares that DIVX failed miserably. Does Don Harrold care that Blockbuster's employees are the laughing stock of the known universe? No, he only cares that they can sell their most valuable asset, your name and address, to anybody willing to pay the price. Does any stock broker care that Best Buy can only manage to hire Blockbuster's rejects? No, they only care that Best Buy purchased Musicland Group (like it wasn't run poorly enough before).

Investors do not care about the microcosm. They do not care how much a certain movie costs this week. They care about the macro, they care how long it takes the company to pay its bill for the billion copies that went out to all their stores. One pissed off customer does not matter to a stock holder. One pissed off customer makes a world of difference to an independent owner.

When is the last time you saw "K-Mart closing 281 stores due to poor customer service"? Once a company becomes a "public" company, they do not serve the customer. It is no longer a cost-effective measure to find out WHY a store is not running smoothly and fix the problem for the customers. It must be a quick resolution of liquidating the assets and locking the door to stem the cash flow to keep the money-hounds happy.

Lets put this in human terms: If you get a small cut on your finger, you might put a bandaid and maybe some medicine on it to help it heal. If you were to sell public shares of your body, and then get a small cut on your finger, you should immediately amputate your whole arm to show the investors that the wound won't become gangrenous and infect the whole body.

Old 03-10-02, 03:53 AM
  #7  
Member
 
Join Date: Mar 2000
Posts: 73
Likes: 0
Received 0 Likes on 0 Posts
Originally posted by Abob Teff
[B]If I am not mistaken, Amazon always could have shown a profit all along. However, Bezos' strategy is/was to take any and all profit (before it becomes profit) and re-invest it into the company (new technologies, new business areas, etc.). This would allow the company major tax benefits while constantly building and growing. It was never an issue of Amazon actually losing money.[B]
Amazon.com has lost 2.87 billion(that's billion folks!) in just four years. They also have a debt of 2 billion! It's true that Amazon.com did spend a lot of money trying to expand, but they have been trying to make a profit for a while now. About the only difference between Amazon and Webvan, Pets.com and other companies which went crazy pissing away money is that Amazon has had a lot more money to piss away than they did. Otherwise Amazon.com would have entered dotcom heaven long ago.
According to the Financial Review Network, Amazon is expected to break even or post about a 16 million dollar loss for this quarter.
http://afr.com/intlbusiness/2002/01/24/FFX0Z700SWC.html

Here is a quote from Bezos from last July, although I'm sure he has been saying he was concentrating on making a profit long before this. http://www.taipeitimes.com/news/2001...ory/0000095716

Bezos, 37, says he is focusing on profitability, and is leading an effort that he calls "Get the CRAP out" to identify items that "Can't Realize Any Profit." Bezos says he will either turn these products into money-makers or dump them.

Last edited by StealThisCoupon; 03-10-02 at 04:01 AM.
Old 03-11-02, 01:00 AM
  #8  
DVD Talk Platinum Edition
 
Join Date: Sep 1999
Location: Seattle, Washington, America the Beautiful
Posts: 3,767
Likes: 0
Received 1 Like on 1 Post
After the "good news" had gone out, Amazon's Chief Financial Officer (CFo) had resigned from the company to seek other challenges... At least he won't be on call for the next quarter.

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread

Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.