Dronamraju Ravi Prakash

NFLX (NetFlix) dropped a bombshell last evening. In view of the competition from amazon, they reduced their guidance to $0.00 in earnings for next year and reduced the subscription price to 18$

umm... amazon hasn't even announced their product yet...

I think the real reason for subscription price reduction is not amazon. I think the price increase has not gone well and subscription acquisition has slowed down. They are using amazon as an excuse to correct their mistake and set the bar low (very low) for next year.

In anycase, right now, investors will be paying $246/consumer when buying NFLX (NetFlix) shares. That compares $216/year each consumer pays Netflix. Now the company looks really interesting, even disregarding the upside from any future growth. I doubt amazon would reduce NFLX customer base immediately, they might put a dent in the growth numbers. However it would take a lot for NFLX to start losing customers. So we are looking at increasingly compelling investment here.

I will definitely pick NFLX up if it drops below 10