Today @C2
July 18, 2018

Netflix plummets. No, skyrockets.

By Matthew Klein



Investors dump $NFLX shares. Investors un-dump $NFLX shares.

On Monday night, investors fled $NFLX when the company missed its own promised subscriber-growth numbers. Shares plummeted in after-hours trading, and the stock opened Tuesday morning down 14%.

But that was Tuesday morning. By Tuesday afternoon, all was forgiven, and $NFLX had rallied +10%, closing at the day’s high.

Which means… what exactly? No one knows.

It might mean people overreacted, and Netflix is a great company, and a great stock, and so who cares about missing a subscriber-growth forecast. (By a lot.)

Or it might mean there are lots of people who follow a trading strategy popularly known as BTFD.

Or it might mean we are in serious bubble territory, with a single sector of the stock market fetishized by investors, and within that sector, just a handful of stocks garnering all investor attention.

Consider this: just four tech stocks — $AMZN, $AAPL, $MSFT, and $NFLX — account for over 80% of the S&P’s total 2018 performance.

So, which is it?

Is Netflix a bubble? A terrific stock? The media company of the future? A cash-burning furnace?

Try all of the above


$TXN CEO joins $INTC and $RMBS at losers table

Texas Instruments CEO Brian Crutcher was fired on Tuesday, due to what the company called “code of conduct violations.” Only a sick, twisted, angry writer would spend his valuable time sifting through Twitter looking for rumors about exactly which conduct policies were violated… so, suffice it to say, I couldn’t find anything. But nowadays “conduct violations” are short for: “stuff that use to be considered fine for CEOs to do, but which aren’t anymore, for now, until the current media hysteria blows over.”

Crutcher joins other former chip-company CEOs at the loser table: $INTC’s Krzanich resigned in June for dating an employee, and $RMBS’s Black for (according to the Rambus Board) “falling short of expectations.” (Geez, if that’s a crime, slide over and make some room for me.)

What is it about semiconductor CEOs and their willingness to flout regulations? How about this dime-store psychoanalysis: semiconductor manufacturing is a ruthless business, with rigid quality controls and low tolerance for any deviation from spec. Maybe by the time you reach position of top dog, you’ve had enough with petty “expectations” and “codes” of “conduct.” Maybe you just want to get a bit crazy.

Meanwhile, $TXN stock was down over 2% after hours.


H e l p D e s k