Hey Marketfy Traders -

Found a great blog post on the financials and future outlook of Netflix Inc, (NASDAQ:NFLX). 

Very thought provoking stuff here for anyone holding the stock long term. Check it out and let me know what you think:

Before Reid Hastings explored producing original content, Netflix’s business model was facing a lot of headwinds. Not only could their strategy easily be copied, but many companies like Verizon and Outerwall (Redbox) were already aggressively pushing into the streaming market. With rising content costs continuously devouring cash and no way to monetize their content library (they rent, not own content), their business model was highly dependent on adding new subscribers and keeping current customers happy. What changed the game was the introduction of original content. By producing shows you can’t see anywhere else on TV/the internet (unless you illegally download them), there was an incentive to use Netflix’s service. And when Netflix felt that it had sucked all of the money from a production, it could then turn around and sell it (or license it) to another company (like CBS or Comcast) and make some of its invested money back. Genius right? Wrong, very wrong. Netflix has expanded so quickly that it is extremely leveraged and depends on a steady flow of new subscribers to help it stay in business. And what makes matters worse is their shady accounting practices. What appears to be a normal balance sheet is littered with hidden bombs – bombs that could go off at any time. Let’s investigate....

To read the rest of the article click here.