Netflix was the best-performing stock of the decade, delivering a 4181% return
Ten years ago – in 2010 – Netflix was worth $2b and had 12m subscribers paying $9 a month – receiving dvds by mail . No late fees… and going head to head with video stores .
CEO Reed Hastings’ shared a vision of streaming videos directly to your lounge.
10 years on it is worth $148b today, giving investors a 4,181% return. $1m invested 10 years ago would be worth $40m today!
The company has had its issues. In 2011 , the share price plunged and company needed more money …. as the company went to streaming $400m was raised!
Jay Hoag’s firm, Technology Crossover Ventures, led that raise pumped in $200 million in exchange for 16 million shares at $12.26 a piece. With the stock now trading at over $336, TCV’s current stake is worth about $1.66 billion after selling a big chunk of its shares in the years since the investment.
“When you’re being contrarian is when you’ll end up with the most exceptional returns, if you’re right,” said Hoag – who is a proud Director of Netflix .
Why did Jays form invest?
- He believed in the team and in Reed Hastings
- Netflix had a Global and Scalable model
- Technology – high-speed broadband would make streaming the bomb
- Licensing movies in a disruptive way
Content and Licencing
It’s all about content and originals seem to be the bomb.
The Irishman, Ozark , House of Cards, Narcos and the Crown are some of the BB series that have taken up a significant portion of my weekends with me binging in front of TV!!
Netflix have invested $15b on content in 2019 up almost 70% from two years who, borrowing more than $10 billion making debt to equity greater than 2:1.
Competition is fierce with HBO, Disney and Warner fighting for content. Recently Netflix have lost “Friends” and “the Office”
This is fantastic news for movie industry and creators – Netflix seems to have revived Hollywood and encouraged creators to create!
Case in point … “Otherhood” was among the 10 most-watched Netflix original films of the year, with 29 million views in its first four weeks.
Subscriber Growth is the upside
12m to 158.3 million in 10 years – with International growth being 62% of the total and a strategy to continue to grow.
That is a powerful catalyst for future growth
With the advent of 5G – will Netflix invest in Gamification and Interactive?
High debt, high costs and high competition with a cash burn create a volatile equation for a company that has over half the market cap of WarnerMedia parent AT&T and only 12% the revenue.
Is Netflix going to continue to Innovate?
You gotta listen to my mother-in-law
You’ve got to accumulate to speculate!