Many of the big tech stocks are insanely overpriced according to traditional investment measures. The rational reasons to support those prices are expectations of similarly extreme future growth or a belief that it might be a speculative investment but the dollars will keep pouring in.

The discussions this week aren't just a wobble, they're about whether Netflix can still generate that kind of extraordinary future growth. If there's even a strong hint that it might not then the speculative bubble bursts. If there's a serious expectation that it won't then the growth investors are out as well. One stock price crash, coming right up.

Netflix was never a “Big Tech stock”. It’s revenue was nothing compared to the Microsofts, Apples, Amazon’s and Google’s of the world.

It's literally the N in FAANG, a term that came from the investment world and referred to (at the time) the five tech stocks that had the most impressive performance.

It was treated that way by one commentator on MSNBC.

But let’s not forget that the original term was FANG and didn’t include Apple - the most valuable tech company or Microsoft that has been in the top 5 since 2000.

Netflix is around #50 in the most valuable companies - it at least it was.

On one hand, their product is not tech… it’s media. On the other hand, they’ve invented some of the best tech and have some of the best engineers.

Their streaming tech is a commodity. Any media company can throw money at someone like BamTech (now owned by Disney) and spin up streaming infrastructure.

I did not know that. Certainly wasn’t true in the past. Glad to hear it’s democratized!

And Streamotion (streamotion.com.au), part of Foxtel.

The market reacted because a much higher subscriber growth was factored into the price. After the massive drop Netflix is still worth $100B and is one of the largest media companies out there, which is nothing to scoff at.

Along with the huge miss this quarter they quided that they will lose another 2 million subs next quarter. That signals and end to growth and a rerating of the stock.

The forecast was to add ~2M subscribers, instead they lost 200K

NFLX got clapped for Q4 2021 earnings too

The market disagrees with the higher poster’s analysis

Netflix was never worth its market cap. It’s been borrowing more money than it’s net profit for years.

Netflix P/E ratio is about 30:1, so Netflix not growing is a bad look.