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When Jim Cramer read the fantastic conference call transcript for Netflix on Wednesday night, he was at a complete loss for words. Did management know that they were about to put on an amazing display to rock the world with video consumption innovation?
"This quarter, the one that came after the brilliant 7-for-1 split that made it easier for retail investors to contemplate owning the stock, was so special that I can't even count all the ways I loved it," the "Mad Money" host said.
After all, Netflix must have done something right if it is up 137 percent for the year. Right?
But rather than just glorifying what went right with Netflix, Cramer decided to share his take on what exactly he heard on the conference call instead.
First, Cramer finds it completely ridiculous to think that all of the opportunity that Netflix has is reflected within its $43 billion market cap. The entire world is gravitating to Netflix for its original content, and it has its grip on the Internet and technology. Netflix is being built into almost all televisions built these days. Its growth trajectory is way too big to be put into that box.
Second, there is the total addressable market of more than 400 million people. Cramer thinks Netflix is a bargain, and it's the bargain concept that is making it so successful. Customers get unlimited viewing of shows and movies for practically the same price of a beer in Manhattan. Everyone can afford it!
Third, the original content is simply brilliant, in Cramer's opinion. It is not being dictated by what the advertisers or movie houses want. It's customer first, so it is allowed to be edgy, funny, serious and in any language.
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Fourth, and perhaps most important, Netflix doesn't care. It doesn't play by the rules! It makes all the wrong projections, not just because management wants to underpromise and overdeliver—but because they just don't know how good they are. However, it does know that if it just keeps giving people what they want, subscribers will keep coming.
"Stop saying 'Holy smokes, Netflix is now bigger than X or Y or Z television or entertainment play.' It should be," Cramer said.
At this point, Cramer thinks it would take a massive effort to screw Netflix up. It really is that good. Just one review of the conference call, and all investors will know why it is so awesome.