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Wednesday, 29 May 2019 08:38

This FANG Will Rise

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(San Francisco)

The FANGs have gotten a lot of market pressure lately, both in the form of sell-offs, but also from analysts, who say tech companies will be among the worst hit by tariffs. However, one fund, Light Street Capital, which has made great returns betting on new technology companies, thinks Netflix has a lot of room to run. They reason they like Netflix is that the company has intentionally made its product very cheap in order to grow its subscriber base. They think there is a lot of room for Netflix to raise prices without alienating customers. Consumers have gotten used to paying $100 a month for cable, but are currently only paying $9-$12 per month for Netflix.


FINSUM: Netflix has a lot of room to expand margins. Think about the effect to earnings if it raised prices to a still very tolerable $14.99 per month.

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