Analyst: Netflix Strong Vs. Verizon-Coinstar Venture
The online video-streaming space just got bigger after Verizon and Coinstar announced a joint venture Monday, but Netflix won’t feel the pressure for a while, one analyst said.
“I actually don’t think it’ll have much of an impact on Netflix in the near term, next six to 12 months,” Credit Suisse analyst John Blackledge said on “Fast Money.”
“Until another provider commits that type of spend, Netflix is likely to continue to extend its lead in streaming,” he added.
Verizon, which will own 65 percent of the venture, and Coinstar’s Redbox DVD rental division plan to launch its new service in the second half of 2012.
Blackledge noted that Netflix already spends $1.2 billion to $1.4 billion per year on streaming content, a formidable hurdle for potential competitors.
Also, Netflix announced development of two original series, “Lillyhammer” and “House of Cards,” as well as a new online-only season of “Arrested Development” — an element Blackledge characterized as “content evolution.”
“We look for that to continue,” he said.
Trader Josh Brown said he did not like the stock on a long-term basis but saw “incredibly trading opportunities in this name because it’s high beta.”
“I think long-term there really is not much here, certainly not just by the market cap, but again, you have a tiger by the tail if you’re long this stock,” he said. “So I think you can ride it to the trailing stop, but it seems to act well on days like today when you expect a sell-off.”
Netflix closed at $129.25 per share, up 2¼ percent. Verizon was up 0.8 percent at $38.14. Coinstar was up 1.8 percent at $50.56.
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Trader disclosure: On Feb. 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; P. Najarian is long AAPL; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long MS; P. Najarian is long YHOO; Grasso is long AVAV; Grasso is long ASTM; Grasso is long BA; Grasso is long D; Grasso is long LIT; Grasso is long MHY; Grasso is long MO; Grasso is long PFE; Grasso is long PRST; Grasso is long S; Grasso is long XLU; Najarian is long FIO; Najarian is long MOTR; Brown is long AAPL; Brown is long JPM; Brown is long COP; Brown is long BRK.B;
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For John Blackledge
The subject company (NFLX) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.
Credit Suisse provided investment banking services to the subject company (NFLX) within the past 12 months.
Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (NFLX) within the next 3 months.
As of the date of this report, Credit Suisse Securities (USA) LLC makes a market in the securities of the subject company (NFLX).
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Campbell is long the March 2012 S&P 500 futures contract
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Dicker is long GLEN
Dicker is long Oil
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For Jagadish Iyer
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