Will Amazon streaming hurt Netflix?
The online retail giant's incursion into streaming video might not disrupt Netflix's dominance, but it might take a toll on its share price. With video commentary.
Am I worried about Amazon's(AMZN) incursion into the world of Netflix(NFLX)? You bet I am. But not because Amazon has a good collection of films and TV shows. And not because its library could one day rival Netflix's. I bet it won't.
I worry because Amazon doesn't have to charge for the service. Amazon is making it a "premium" for subscribing to Amazon Prime. When you give something away that others charge for, it is always going to be a problem.
Mind you, I am not worried about the dominance of Netflix; I am worried about the multiple of Netflix's stock. You need smooth sailing to stay on the Netflix horse. You need to have no real competitors of consequence. That's why I was never worried about Coinstar(CSTR).
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So there's no way I can't worry about Amazon's competition and its impact on what we will pay for the future of Netflix's earnings.
I say let the stock come in. Let it come in. It's up huge. You have a profit in some? Take it.
You can buy it later.
Nothing ever wrong with that.
Random musings:Libya has changed everything. I reiterate that the best opportunities are the ones where energy and commodity plays are hammered below the 10% to 15% threshold as if they are consumer discretionary stocks -- something that happens because of the commoditization of the stock market via futures. I remain indifferent toward everything else, as the setting is too grim to be opportunistic without further declines.
At the time of publication, Cramer had no positions in the stocks mentioned.
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But the fact that the guilty bankers are still free and not even on the run is the real outrage here, a travesty that should never be forgotten.
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