Comparing Netflix, Inc. (NFLX) & HBO From BTIG’s Point of View


BTIG has always been skeptical of Netflix, Inc. (NASDAQ:NFLX) rise over the past few months. Back when Netflix, Inc. (NASDAQ:NFLX)’s stock had broken the $400 mark for the first time in February this year, BTIG had posted a long Blog on its website on the implied value of HBO relative to the market value of Netflix, Inc. (NASDAQ:NFLX). As an article from Benzinga highlighted, BTIG has again taken shots at Netflix, Inc. (NASDAQ:NFLX) when it crossed the revenue figures of HBO.

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In its Blog on February, BTIG had questioned whether the valuation of Netflix, Inc. (NASDAQ:NFLX) at $25 billion was justified when HBO, being a part of the Time Warner Inc (NYSE:TWX) was valued at $26 billion. Things heated up when Netflix, Inc. (NASDAQ:NFLX)’s Reed Hasting posted that Netflix, Inc. (NASDAQ:NFLX) has overtaken HBO in revenues for the first time, on his Facebook page last Wednesday. BTIG had released a note following the post from Hasting, saying that the current value of HBO stood at $30 billion owing to increase in Time Warner Inc (NYSE:TWX)’s stock while Netflix, Inc. (NASDAQ:NFLX) was valued at $26 billion.

BTIG commented in its note that one should keep in mind that not all subscribers are created equal while pointing to the global subscriber disparity in analyzing the relative market value of Netflix, Inc. (NASDAQ:NFLX) and HBO. Moreover, BTIG also added in its note that the most common response to Hasting’s post has been,”so what, HBO is far more profitable”.

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