My Two Bits on Netflix Rate Changes.

Netflix is one of today’s top stories and where my wife and I own stock in the company I thought I give you our diverse perspectives on the whole issue of Netflix raising rates. On the bulls side for this stock is my wife and I take the bears side. My wife absolutely loves the company and the stock. She agrees with the CEO that it should not be everything to everyone. She likes to look at Netflix as being an online library of movies, and tv shows. Just like you would go into a public library to borrow a DVD or VHS tape, you go to Netflix to find something that you might enjoy, though not absolutely love. My wife believes that people are over reacting to the news of the rate hikes, and that people are not thinking logically on the matter. Because when they do  they will realize that it’s a win win for everyone. Yes Netflix can trim staff, and with fewer DVD rentals going out the door, they can now use the cost savings from the DVD side of the business, and use those savings to acquire content deals. Valid points. We are like every one else who subscribes to Netflix. We had the talk last night after dinner about which pricing plan do we go with, and like most people we will go with the $7.99 option. Though unlike most people we will wait, and take advantage of the last month of the $9.99 plan. Then closer to 9/1 change over to the unlimited streaming for $7.99. We will do as most everyone else is doing look at RedBox as an option when we want to see a movie that’s only on DVD. When it comes to the stock, my wife loves it, and thinks it will go higher. She wanted to buy the stock when it was at a hundred. We did against my better judgement. I have this thing about buying stock over a hundred dollars. I don’t like too. To me any stock over a hundred is bordering on pricey, and I usually look for right time to sell at or above that level, since I believe in the old saying buy low and sell high. I am rather sceptical of the Netflix business model. I believe that it can turn a profit but I have to wonder if it can turn a large enough profit to be fairly priced at these levels. Netflix will loose some customers as a result of the rate hikes but can they add customers in Latin America to offset the losses in the States? To me that will be something that the company will have to prove in order for it to be to judge at fair value at the 290 level.

I have to admit here that we own Apple and Google stock. I look for both to go higher, and then we are selling. We plan on selling Google near the 600 ceiling, this stock is like a roller coaster, we like it but want to take some profits at or near a good top. As for Apple I think we’ll be sitting on this one for awhile, too much upside potential.

Those are my Two Bits...............Eric