Netflix (NFLX) CEO Reed Hastings, whose blunders in 2011 will be dissected in business schools for generations to come, may be laying the groundwork for another whopper with his expansion into the U.K. and Ireland. The downside risk is huge.

For example, business leaders in the U.K. expect the country's economy to get worse in 2012, according to a poll released Monday.  A recent Goldman Sachs survey forecast that the U.K.'s gross domestic product (GDP) will rise 0.7% this year, down from 0.9% in 2011.

 Ireland, which got a $113 billion bailout in 2010, isn't in great shape either. Data from the Irish government says that the country's economy contracted by about 2%, worse than expected, in the third quarter. Ireland, which had the second-worst performing eurozone economy behind Greece in the third quarter, slashed its GDP forecast twice in December and now expects growth in 2012 of 1.3%.

Shares of the Los Gatos, Calif. company, which got pulverized last year, are trading up Monday morning even though Netflix admitted that it may not be profitable in 2012 because of its overseas expansion. Moreover, it is taking on a formidable competitor in Amazon.com's (AMZN) Lovefilm business. The 7-year-old Amazon business claims about 2 million members in the U.K., Germany, Sweden, Denmark, and Norway.

Hastings, who lost 800,000 customers in the third quarter, told Reuters that Netflix regained customers in the fourth quarter though he was vague on specifics, telling the news service ". . . we're doing great," and adding that the firm didn't need to raise additional capital. Maybe consumers have forgiven Netflix, or maybe they have forgotten about its missteps.

Netflix, though, has many challenges ahead, including rising cost for content. This is the year that Hastings will have to put up or shut up. Investors have grown tired of his empty rhetoric. If he wasn't a major shareholder, the CEO would have lost his job long ago.

Jonathan Berr does not own shares of the listed companies.