In this video, I will discuss the netflix earnings results briefly and why the stock is really down 10%. This has to do with a less than stellar guidance but mostly because of the co-founder, ex ceo and chairman for 30 years, Reed Hasting, leaving the company for good. This signals the market that a huge change could happen and the market is assuming the worst.
Reed leaving means that there could be a shift in culture, strategy, results, and the way things are at the company. The market is assuming that the replacement just cannot be someone as good as the co-founder. This is a correct assumption however, we should look at all the scenarios.
This is why I designed an option strategy that could work the best in the short term and mid-term based on who might replace the co-founder. If you are not a fan of option trading, but like Netflix as a company, then you can still trade based on the replacement announcement.
As an investor, you always want to seperate the noise from the actual signal. The 10% may look daunting as first, but it is also an opportunity in the short term and perhaps long term as well. The replacement comes after the failed WBD takeover and can take a look at the company with a fresh pair of eyes.
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