Netflix Week 1: The Inception

Netflix

Parents hate it. Teachers hate it. Teenagers love it. Arguably the best way to waste time and avoid homework or chores, many kids and adults alike turn on their mobile devices or TVs to binge their favorite shows on one of the most popular internet streaming services: Netflix.

Netflix, founded in 1997 by Reed Hastings and Marc Randolph, is an international company that provides both internet streamed TV shows and movies as well as discs and Blu-Ray. Netflix works with producers to license content in addition to creating its own. CEO and founder Reed Hastings has managed the company for the past twenty years, working out of Netflix headquarters in Los Gatos, California. Netflix began as an online rent-a-DVD service and added its monthly subscription component in 1999. Randolph eventually left the company in 2002, leaving Hastings as acting CEO. The corporation went public on May 29, 2002 at $15.00 per share for 5.5 million shares. Hastings soon created Netflix’s streaming service in 2007, enabling users to instantly watch content. In 2013, “House of Cards,” Netflix’s first original program, debuted; Netflix would continue to create popular original content, including “Orange is the New Black” and “Stranger Things.” Today, Netflix has over 118 million subscribers and currently trades at $348.68 for a market cap of 151.84 billion.

Hastings.jpg
CEO and Chairman Reed Hastings

I chose to cover Netflix for the fall semester because of its prevalence in the technology sector and the market at a whole. Netflix is a relatively young company, and yet it is internationally known and has a significant market cap. The technology sector as a whole is extremely popular right now, with Netflix being a sector leader. I am also a user of Netflix, and covering the company would enable me to understand more about the interface and its future plans. I see Netflix moving towards more original content, and I am curious to see how the stock reacts as well as the public. The public has an emotional connect to Netflix, and it will be interesting to see how developments in the television and technology industries will impact it.

Given my limited knowledge of Netflix, I would be interested in working in Los Gatos. Netflix provides a valuable service to the community, enabling individuals to view educational and personal videos and programs. The culture seems to embrace creativity and community. There is also the ability to climb the ladder at Netflix, for many top officials were once at entry level positions. The company has a relatively positive public image, somewhat clouded by the Kevin Spacey scandal and their unsuccessful attempt at Qwikster. Despite these, I would consider working for Netflix because of its upside as a company and the potential for vertical mobility.

I would invest in Netflix because I believe is it significantly undervalued. Netflix trades at $348.68 with a 52 week range of $176.55 to $423.21. This dip in price seems like an opportunity for investment ahead of gains. I am excited to see what happens over the course of the semester and to learn more about the organization.

Sources:

https://www.reuters.com/finance/stocks/company-profile/NFLX.O

https://www.cnn.com/2014/07/21/showbiz/gallery/netflix-history/index.html

https://www.investopedia.com/markets/stocks/nflx/

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