While the broader markets have gone nowhere since reaching their peak in April, Netflix stock has doubled! Of course, the company has been going gangbusters while the competition lays by the wayside. Reasons attributed to the meteoric rise are expansion into Canadian markets, savings from postage costs as more subscribers shift to watch content online and the potential to add more subscribers attracted to its increasing arsenal of entertainment programming.
In spite of these reasons, valuing such a company at almost 60 times earnings is insane! This is purely a momentum stock. While it may do really well as a company in the long run, the stock will most likely not give good returns for anyone buying at such lofty levels. I just shorted some, ready to get my fingers burnt a little but will bail if it continues to go stratospheric.
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