🔒 Premium: Mr Market’s 20% Netflix tantrum suggests he’s completely out of control.

Mr Market’s mood has turned decidedly nasty.

Last night Netflix released quarterly results showing the company’s exponential expansion is continuing – 2021 full year revenues were up 19%, operating income rose 35%. Subscriber growth in the quarter was the 5th highest ever.


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But Mr Market focused on a single item – the forecast of muted subscriber growth for 1Q 2022. He smashed the share price by 20% in after-hour trading, taking it from an already depressed $508 to $405.

Below is the full report on the results from our partners at the WSJ so you can make up your own mind about Mr Market’s reaction. My reading is this erratic behaviour reflects what happens close to turning points.

What the manic depressive does next is anyone’s guess. What we do know for certain, though, is today’s buyers will be acquire co-ownership of Netflix at a sizeable discount to yesterday’s investors – among which were top-ups in the BizNews portfolios.

Much more important is to ask ourselves whether the fundamentals of Netflix’s business have changed? Has its hugely successful think local, leverage global approach been derailed? Is Reed Hastings’ long-term strategy on track? For me, the answer to all three is yes. So relax.

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