Would you purchase a private company for $1m that earned $6,600 in the past twelve months? Well that's what you're getting right now if you buy $NFLX - a big fat earnings yield of 0.66%. Don't worry though, this is the "new" economy.
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Replying to @Tinyvalue
Depends on how much the co will make in the future. Companies are valued on future FCF not past.
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Replying to @alphagen68
If you can conservatively forecast Netflix's earnings in a way that might justify its current price, I'll take a photo of me wearing underwear as a hat and will keep it as my Twitter photo for a month.
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Replying to @Tinyvalue
Wasn’t commenting about NFLX. Was pointing out you were asking the wrong question.
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Replying to @alphagen68
Oh whoops! Well I still liked my reply anyway, and the offer stands. Yeah I can't imagine how anyone could buy a company at such a multiple on the basis of future earnings. Such a company would have to compound at 30% for 10 years to generate a 9% earnings yield on initial price.
1 reply 0 retweets 2 likes
Would be an incredibly un-businesslike "investment." Perhaps a wonderful speculation though.
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