1
00:00:00,200 --> 00:00:03,000
Well, this looks kind of bad 
Straight From The Verge. 

2
00:00:03,000 --> 00:00:06,600
It says, Netflix stock plunges 
as the company, mrs. 

3
00:00:06,600 --> 00:00:09,900
Growth forecast, investors 
aren't pleased. 

4
00:00:10,000 --> 00:00:11,400
All right, Virgil speak for 
yourself. 

5
00:00:11,500 --> 00:00:14,500
I'm a Netflix investor. 
Let's go ahead and see how not 

6
00:00:14,500 --> 00:00:16,400
pleased, I am. 
Let me go ahead and zoom in on 

7
00:00:16,400 --> 00:00:17,900
this will go through the news 
together. 

8
00:00:18,200 --> 00:00:21,500
This doesn't sound good though, 
the stock is plunging Netflix. 

9
00:00:21,500 --> 00:00:24,000
Investors have been worried 
about the company that the 

10
00:00:24,000 --> 00:00:26,900
company isn't adding subscribers
fast enough. 

11
00:00:27,100 --> 00:00:29,000
And today, they started to 
panic. 

12
00:00:30,000 --> 00:00:31,800
It's investors, are in a full-on
panic. 

13
00:00:31,800 --> 00:00:34,800
This sounds really bad. 
After Netflix reported lower 

14
00:00:34,800 --> 00:00:37,400
than projected subscriber 
additions for the final quarter 

15
00:00:37,400 --> 00:00:40,400
of 2021. 
Great, they missed on subscriber

16
00:00:40,400 --> 00:00:43,300
additions. 
They must have missed by a lot. 

17
00:00:43,400 --> 00:00:45,700
I'm just assuming by this 
article, they missed by a few 

18
00:00:45,700 --> 00:00:48,200
million. 
It sounds pretty bad, the stock 

19
00:00:48,200 --> 00:00:52,600
plummeted, nearly 20%, 20%. 
This has got to be one of the 

20
00:00:52,600 --> 00:00:57,100
worst sell-offs in Netflix's 
entire history, 20% after hours,

21
00:00:57,100 --> 00:00:59,900
in one day, it's not like the 
stock recently had a huge run 

22
00:01:00,400 --> 00:01:04,500
It's down 20% already before the
sell off from its all-time high.

23
00:01:04,900 --> 00:01:08,900
So investors have sold off 
another 20% after hours, they 

24
00:01:08,900 --> 00:01:12,700
say the plunge was the lowest 
astok had dropped since June of 

25
00:01:12,700 --> 00:01:17,500
2020 Okay, that doesn't sound 
good at all last quarter, 

26
00:01:17,500 --> 00:01:22,400
Netflix had forecasted that it 
would report. 220 point zero, 

27
00:01:22,400 --> 00:01:26,200
six million subscribers. 
So that was Netflix is crazy 

28
00:01:26,200 --> 00:01:29,400
prediction. 
Obviously Netflix, drop the ball

29
00:01:29,400 --> 00:01:32,000
here, they probably didn't get 
anywhere close to this number 

30
00:01:33,000 --> 00:01:35,100
million paid subscriptions by 
the end of last year. 

31
00:01:35,400 --> 00:01:38,900
Instead the company reported 
Thursday that it ended the 

32
00:01:38,900 --> 00:01:44,900
fourth quarter with 220 1.84. 
Wait a minute. 

33
00:01:44,900 --> 00:01:52,400
So this big Miss with their 
subscribers is from 220 2.0, 62 

34
00:01:53,000 --> 00:01:57,400
220 1.84. 
So they missed their big 

35
00:01:57,400 --> 00:02:00,500
subscriber prediction by less 
than a tenth of a percent. 

36
00:02:00,800 --> 00:02:03,800
That is their big miss. 
That can't be why investors are 

37
00:02:03,800 --> 00:02:06,400
concerned. 
Not because they added eight 

38
00:02:06,400 --> 00:02:09,600
point three million subscribers 
in the past. 90 days, a lot of 

39
00:02:09,600 --> 00:02:13,200
new subscribers in all around 
the world, in the US, and across

40
00:02:13,200 --> 00:02:15,200
the seas. 
But Let's go ahead and continue 

41
00:02:15,200 --> 00:02:17,200
on and see what really got to 
Netflix. 

42
00:02:17,700 --> 00:02:20,000
It's a small difference but 
investors have been worried 

43
00:02:20,000 --> 00:02:23,200
about Netflix. 
Okay, already one of the biggest

44
00:02:23,200 --> 00:02:26,000
streaming companies out there 
being able to find new ways to 

45
00:02:26,000 --> 00:02:28,400
keep growing and by Netflix is 
on estimates. 

46
00:02:28,700 --> 00:02:32,000
Subscriber growth is going to be
low next quarter as well. 

47
00:02:33,300 --> 00:02:37,300
The company estimates that it 
will add 2.5 million subscribers

48
00:02:37,300 --> 00:02:41,500
in the first quarter of 2022 
down from 4 million during the 

49
00:02:41,500 --> 00:02:46,000
same period last year, man. 
That sounds awful. 

50
00:02:46,600 --> 00:02:49,700
You're telling me a company that
just gained eight point three 

51
00:02:49,700 --> 00:02:52,300
million News. 
Net additions is only going to 

52
00:02:52,308 --> 00:02:55,000
add another two point. 
Five million next quarter 

53
00:02:55,200 --> 00:02:57,700
instead of the four million that
they added last year of the same

54
00:02:57,700 --> 00:03:00,900
quarter, meaning they won't have
the exact same growth year over 

55
00:03:00,900 --> 00:03:02,500
year and subscribers when they 
have. 

56
00:03:02,600 --> 00:03:05,700
Content, slates different 
releases of content in different

57
00:03:05,700 --> 00:03:07,500
times. 
That is horrible. 

58
00:03:07,800 --> 00:03:09,400
This sounds really bad for 
Netflix. 

59
00:03:09,500 --> 00:03:11,900
Now, that all said, plenty of 
people are still coming to him 

60
00:03:11,900 --> 00:03:16,200
paying for Netflix, Revenue 
grew, 16 percent year-over-year.

61
00:03:16,800 --> 00:03:20,300
Didn't people just sell out of 
this company by 20% so far. 

62
00:03:20,300 --> 00:03:23,500
They missed their overall 
subscriber numbers by one tenth 

63
00:03:23,500 --> 00:03:25,900
of a percent. 
They're almost perfectly 

64
00:03:25,900 --> 00:03:27,900
accurate with it on the the 
whole number. 

65
00:03:27,900 --> 00:03:31,900
There, they grew by eight point.
Three million subscribers last 

66
00:03:31,900 --> 00:03:33,900
quarter. 
And they grew their revenue by 

67
00:03:33,900 --> 00:03:37,000
16 percent year-over-year. 
This is a company that that 

68
00:03:37,000 --> 00:03:40,100
people are running to the exits 
from investors are fleeing like 

69
00:03:40,100 --> 00:03:42,900
it's a burning building, right? 
And I'm stuck here, like the 

70
00:03:42,900 --> 00:03:45,000
captain of the Titanic going 
down with the ship. 

71
00:03:45,300 --> 00:03:48,200
This is the big bad company 
that's happening with they say 

72
00:03:48,200 --> 00:03:50,400
and paid membership. 
Rose nine percent 

73
00:03:50,400 --> 00:03:52,500
year-over-year. 
So revenues growing, paid 

74
00:03:52,500 --> 00:03:55,600
membership is growing but in 
this must be the big caveat 

75
00:03:55,600 --> 00:03:57,500
here. 
While Netflix is still growing, 

76
00:03:57,500 --> 00:04:01,200
it's doing so incrementally. 
It's not growing quite as fast, 

77
00:04:01,200 --> 00:04:02,500
both subscribers and revenue 
growth. 

78
00:04:02,600 --> 00:04:06,000
Have been pain points for 
anxious investors, particularly 

79
00:04:06,000 --> 00:04:09,600
in the US the company's biggest 
Market while retention 

80
00:04:09,600 --> 00:04:11,100
engagement. 
Remain healthy. 

81
00:04:11,300 --> 00:04:14,400
Acquisition growth has not yet. 
Read accelerated to pre covid 

82
00:04:14,400 --> 00:04:16,300
levels. 
The company said, we think this 

83
00:04:16,300 --> 00:04:19,500
may be due to several factors 
including ongoing covid overhang

84
00:04:19,500 --> 00:04:23,300
and macro economic hardship and 
several parts of the world like 

85
00:04:23,300 --> 00:04:26,800
Latin America. 
So maybe this is just a cop-out 

86
00:04:26,800 --> 00:04:31,400
from Netflix blaming the covid 
overhang but it is ironic that 

87
00:04:31,400 --> 00:04:34,000
Spotify. 
Use the exact same cop out as 

88
00:04:34,000 --> 00:04:35,700
well. 
They said that according to 

89
00:04:35,700 --> 00:04:39,000
their data places, it still have
issues with covid and their 

90
00:04:39,000 --> 00:04:41,500
economies are still affected. 
They're seeing more struggles 

91
00:04:41,500 --> 00:04:45,200
with engagement and growth there
as comparable to other parts of 

92
00:04:45,200 --> 00:04:48,000
the world. 
Now The Verge goes aren't they 

93
00:04:48,000 --> 00:04:51,300
say somewhat curiously? 
Netflix had very little to say 

94
00:04:51,300 --> 00:04:55,200
about its recent price, hike in 
the u.s. instead, it pointed to 

95
00:04:55,200 --> 00:04:59,100
recent play something feature as
one example of the way, the 

96
00:04:59,100 --> 00:05:03,000
company adds value for its users
ahead of its call, the Also 

97
00:05:03,000 --> 00:05:05,800
appeared to preemptively waft 
away. 

98
00:05:05,800 --> 00:05:09,000
Any investors concerns about its
increased competition during the

99
00:05:09,000 --> 00:05:12,200
last two years they say, quote, 
while this added competition, 

100
00:05:12,200 --> 00:05:14,100
may be affecting our marginal 
growth. 

101
00:05:14,100 --> 00:05:17,600
Some, we continue to grow in 
every country and region in 

102
00:05:17,600 --> 00:05:20,400
which these new streaming 
Alternatives have launched. 

103
00:05:20,800 --> 00:05:24,800
So Netflix there they did 
actually admit right here in 

104
00:05:24,800 --> 00:05:27,300
their earnings report. 
That competition is having an 

105
00:05:27,300 --> 00:05:30,000
effect, which of course, it is 
to some extent, but they also 

106
00:05:30,000 --> 00:05:32,000
acknowledge that they're still 
growing and every single 

107
00:05:32,000 --> 00:05:33,700
country. 
And region that they operate, 

108
00:05:33,700 --> 00:05:36,300
they grew subscribers in the 
u.s. they grow in Canada, they 

109
00:05:36,300 --> 00:05:39,800
grow in Latin America, they grew
mostly in the passive Pacific 

110
00:05:39,800 --> 00:05:43,300
Asia area so they're growing all
around the world everywhere. 

111
00:05:43,700 --> 00:05:46,600
Even where this competition now 
they say this reinforces our 

112
00:05:46,600 --> 00:05:49,700
view that the greatest 
opportunity and entertainment is

113
00:05:49,700 --> 00:05:53,400
the transition from linear to 
streaming and with that still 

114
00:05:53,400 --> 00:05:57,300
under 10 percent of total TV 
screen time in the u.s. 

115
00:05:57,600 --> 00:06:01,700
So streaming still represents 
less than 10% of screen time in 

116
00:06:01,700 --> 00:06:04,900
the US. 
And overseas across the world. 

117
00:06:05,200 --> 00:06:07,000
The opportunity is virtually 
Limitless. 

118
00:06:07,000 --> 00:06:10,100
There's over a billion 
households that have internet 

119
00:06:10,100 --> 00:06:12,200
connection that don't yet have a
Netflix. 

120
00:06:12,200 --> 00:06:15,500
So the opportunity remains 
pretty large, they say perhaps 

121
00:06:15,500 --> 00:06:19,600
Netflix, biggest concern, should
be its growth and sign-ups are 

122
00:06:19,600 --> 00:06:22,700
slowing even during a quarter in
which Netflix, premiered, two of

123
00:06:22,700 --> 00:06:26,700
its most viewed films ever read.
Notice and don't look up to keep

124
00:06:26,700 --> 00:06:30,000
investors nerves calm, Netflix 
will need to start accounting 

125
00:06:30,000 --> 00:06:32,400
for its sluggish growth or at 
least spin. 

126
00:06:32,500 --> 00:06:34,100
Up some creative ways to justify
it. 

127
00:06:34,100 --> 00:06:35,300
Moving forward. 
Okay. 

128
00:06:35,300 --> 00:06:38,200
So that all makes sense that 
virtue article really covered 

129
00:06:38,200 --> 00:06:39,800
it. 
That's the reason that investors

130
00:06:39,800 --> 00:06:42,600
are fleeing out of Netflix 
because of all this bad news in 

131
00:06:42,600 --> 00:06:45,700
the last quarterly report just 
to summarize. 

132
00:06:45,900 --> 00:06:50,100
This big 20% sell off today. 20%
after hours which is a 

133
00:06:50,100 --> 00:06:53,700
substantial sell-off is caused 
by a couple different things. 

134
00:06:53,700 --> 00:06:55,700
Let's summarize, what's going on
with the company? 

135
00:06:56,200 --> 00:07:00,400
First of all, it has 220 1.8 
million subscribers, it grew at 

136
00:07:00,400 --> 00:07:02,400
subscribers all across the 
globe. 

137
00:07:02,600 --> 00:07:04,600
It grew them in the US last 
quarter. 

138
00:07:04,800 --> 00:07:08,400
It rhythm in Latin America, the 
grew them in Asia Pacific and it

139
00:07:08,400 --> 00:07:11,400
grew them in Europe. 
Every corner of the earth likes 

140
00:07:11,400 --> 00:07:14,200
Netflix and they're growing 
subscribers everywhere. 

141
00:07:14,600 --> 00:07:17,300
That's the first thing that's 
the first part of the report. 

142
00:07:17,600 --> 00:07:20,300
The second is that they beat 
their earnings per share. 

143
00:07:20,700 --> 00:07:22,900
I mean, they just Crush their 
earnings per share guidance but 

144
00:07:22,900 --> 00:07:25,800
nobody cares about that. 
Their revenue grew 16 percent 

145
00:07:25,800 --> 00:07:28,100
year over year which is very 
strong growth of a company. 

146
00:07:28,100 --> 00:07:31,100
The size they're operating 
income grew by 35 percent year 

147
00:07:31,100 --> 00:07:34,100
over year, they know, Oh in 
their earnings report that 

148
00:07:34,100 --> 00:07:37,300
engagement remained very strong 
and the company's free cash flow

149
00:07:37,300 --> 00:07:40,700
positive from this year. 
They're projecting be free, cash

150
00:07:40,700 --> 00:07:44,400
flow positive and every year in 
the future, meaning that unlike 

151
00:07:44,400 --> 00:07:47,500
many of those other streaming 
services that are getting loans 

152
00:07:47,500 --> 00:07:50,300
and debt and they're trying to 
raise Capital to pay for all 

153
00:07:50,300 --> 00:07:54,200
their content, Netflix can 
self-fund from here and 

154
00:07:54,200 --> 00:07:57,100
definitely they can continue to 
self-fund at this level. 

155
00:07:57,100 --> 00:08:01,100
That is a summary of this bad 
earnings report, 16 percent 

156
00:08:01,100 --> 00:08:04,500
earnings growth beating Per 
share, free cash, flow positive,

157
00:08:04,500 --> 00:08:07,800
8.3 million, net addition ads, 
last quarter, and they're 

158
00:08:07,800 --> 00:08:09,800
projecting two and a half 
million this quarter. 

159
00:08:10,100 --> 00:08:12,400
And they say the reason why it's
a little bit less this quarter 

160
00:08:12,400 --> 00:08:15,100
than the rest of the year, is 
because their contents late is 

161
00:08:15,100 --> 00:08:17,500
more heavily weighted towards 
the end of the year. 

162
00:08:17,600 --> 00:08:19,900
So in my opinion, when I look at
the fact that Netflix is still 

163
00:08:19,900 --> 00:08:22,800
continuing to grow everywhere in
the world, their average revenue

164
00:08:22,800 --> 00:08:25,500
per user is going up their 
revenues growing their operating

165
00:08:25,500 --> 00:08:28,800
margins growing, their free cash
flow continues to be positive 

166
00:08:28,800 --> 00:08:32,000
and growing in the future and 
overall the engagement of the 

167
00:08:32,000 --> 00:08:33,299
company. 
Remains strong. 

168
00:08:33,500 --> 00:08:36,299
They have the most subscribers 
with the highest average revenue

169
00:08:36,299 --> 00:08:37,900
per user than any streaming 
service. 

170
00:08:38,400 --> 00:08:41,000
I don't see much to be concerned
about here, and I think that 

171
00:08:41,000 --> 00:08:44,800
this reaction from the market is
a substantial over reaction. 

172
00:08:45,300 --> 00:08:47,400
Even when I look at their 
earnings report, it goes on 

173
00:08:47,400 --> 00:08:50,600
explaining why they have lower 
projections for this quarter. 

174
00:08:50,800 --> 00:08:54,200
They say that the content slate 
is a little bit lighter this 

175
00:08:54,200 --> 00:08:56,300
quarter and it's more heavily 
weighted towards next quarter. 

176
00:08:56,300 --> 00:08:59,500
So, they are expecting this, 
that's what they're forecasting.

177
00:08:59,800 --> 00:09:02,300
They also mention that they're 
winning more Emmys. 

178
00:09:02,500 --> 00:09:05,000
They're winning more Oscars. 
In any other streaming service 

179
00:09:05,300 --> 00:09:09,300
Netflix has the dominant lead in
streaming even after this 

180
00:09:09,300 --> 00:09:11,100
quarter. 
They continue with the dominant 

181
00:09:11,100 --> 00:09:12,800
lead. 
No, other company has as many 

182
00:09:12,800 --> 00:09:14,700
subscribers. 
None of them have any. 

183
00:09:14,700 --> 00:09:17,500
We're as close to the same 
average, revenue per user. 

184
00:09:17,800 --> 00:09:20,000
They're not even close. 
And none of them have the same 

185
00:09:20,000 --> 00:09:21,600
International strategy is 
Netflix. 

186
00:09:21,600 --> 00:09:24,700
So, when I look at this 
sell-off, I think it's a big 

187
00:09:24,700 --> 00:09:27,000
over reaction. 
That's my opinion on it but 

188
00:09:27,000 --> 00:09:29,800
again, I could be wrong. 
I'm invested in Netflix. 

189
00:09:29,800 --> 00:09:32,000
I like the company. 
This hasn't changed my mind. 

190
00:09:32,400 --> 00:09:34,600
The only thing that's changed 
from this is the price of the 

191
00:09:34,600 --> 00:09:37,600
company and I will be 
accumulating a bigger position 

192
00:09:37,600 --> 00:09:39,900
in it. 
So as the sell-off goes through 

193
00:09:39,900 --> 00:09:42,700
and we see the shares decline in
value, I'm going to continue 

194
00:09:42,700 --> 00:09:45,800
picking up as many shares as I 
can, because as far as I'm 

195
00:09:45,800 --> 00:09:49,500
concerned, the story of this 
company and the future of it has

196
00:09:49,500 --> 00:09:52,400
not materially changed at least 
in this earnings report. 

197
00:09:52,600 --> 00:09:55,900
I see almost nothing to be 
materially concerned about. 

198
00:09:55,900 --> 00:09:58,200
So that's my thoughts on this 
earnings report, the honest 

199
00:09:58,200 --> 00:10:00,300
thoughts on it, aside from the 
sell-off. 

200
00:10:00,300 --> 00:10:02,600
I feel very happy as a 
shareholder of this Knee. 

201
00:10:02,800 --> 00:10:05,300
I feel like the company is 
stronger today. 

202
00:10:05,400 --> 00:10:07,100
The only thing that's really 
changed in my opinion, it's the 

203
00:10:07,100 --> 00:10:08,800
price. 
So I'm going to be buying more 

204
00:10:08,800 --> 00:10:10,100
of it. 
I'm interested to hear your 

205
00:10:10,100 --> 00:10:12,200
thoughts. 
If you want to portfolio update,

206
00:10:12,200 --> 00:10:13,800
I'll be giving one later this 
week. 

207
00:10:13,800 --> 00:10:16,700
So subscribe to the channel. 
I'll have more content out in 

208
00:10:16,700 --> 00:10:17,200
the future.