We have witnessed great dive in $Netflix(NFLX)$ lstock in the past few days. 37% plummet? The last we saw this happening was in the China tuition stocks when China banned paid tuition services.
Now that the share price has come to a new low, is it time to jump to buy the dips, or to steer clear from it?
I always believe that in the long run, the share price of the stock will reflect the intrinsic value of the company. Ask yourself, 5 years down the road, will you still be using Netflix service? Are there still rooms for Netflix to expand its business or customer bases? Will Netflix still have a competitive advantage over others?
In my view, Netflix is the new norm of how people get their tv entertainment. I believe Netflix is here to stay. By offering lower priced subscription service with advertisements, Netflix will earn from both an increase in customer base and advertising revenue. Hence, I believe it will be good to buy the dips.
I will start a position if $Netflix(NFLX)$falls below 200. How about you?
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