Quoted: on Netflix rising and recovering

“It’s clear that they’ve recovered from their snafu of splitting the company up.”

Jason Helfstein, Oppenheimer & Co. analyst, on Netflix, referring to the company’s 2011 move to separate its DVD and streaming divisions. The Los Gatos entertainment provider on Wednesday reported fourth-quarter results that included a surprise profit — the company had previously warned of a loss — plus a gain of 2 million streaming subscribers, which CEO Reed Hastings credited to holiday purchases of tablets and Net-connected devices. With the company expecting to add 1.7 million subscribers in the current quarter and several brokerages issuing upgrades or raising their target prices on the stock, Netflix shares were soaring today, up nearly 40 percent to $142.15 as of this post. Still, some remain skeptical the Netflix story will have a happy ending, because they say the costs of expansion and buying content are high. “I think the company is genuinely mistaken in how it thinks it is going to manage content costs. This is truly a house of cards and it’s going to come crashing down this year,” Wedbush Securities analyst Michael Pachter said, according to the Associated Press. (Netflix’s original series, “House of Cards,” which has been called “a bold attempt to remake the television landscape,” is set to make its debut Feb. 1.)

 

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