Netflix: Reed Hastings Strategizing For His Life Right Now

While I appreciate Netflix's recent shift in strategy -- it appears to be spending less or, at the very least, spending smarter -- it's in no position to robustly handle its obligations. Another round of fundraising would not surprise me a bit.

So, that's the logical answer. If you're Microsoft or Amazon.com (AMZN) or any of the other rumored suitors, why would you take on somebody else's problem?

It makes zero logical sense. MSFT, AMZN and other big names can -- and AMZN has -- do these content deals Netflix is on the hook for on their own.

But because logic does not always prevail ... and because, speaking of illogic, Steve Ballmer is still the CEO at Microsoft, I can't rule out a takeover.

That's where the company-killing, morale-crushing stubbornness of Reed Hastings comes into play.

He refuses to do anything other than dig a deeper hole with international expansion to generate more revenue.

Any CEO with his shareholders' best interests in mind would have been shopping this thing around for months. Doing whatever it takes. Offer to step aside. Make the pledge that you're willing to start from "the bottom" and work in a DVD distribution center until you can prove you deserve to run the show again.

Icahn knows all of this. He's no fool. But he's playing the media like a gaggle of fools.

However, he's not playing Reed Hastings for a fool. Hastings knows the score. I just don't think he has any idea how to move forward.

I wonder if Hastings should phone former Blockbuster CEO John Antioco. Antioco had to deal with Icahn back in the day. Reed knows all about how that went down.

Of course, it would be poetically justified if Antioco refused to take Hastings' call. That's apparently what the deer-in-the-headlights CEO is doing to Icahn right now.

Scary times at Netflix again. Almost certain chaos behind the scenes. Manic strategizing. If you're long, you better hope Hastings really learned from last year's mistakes.

At the time of publication, the author held no positions in any of the stocks mentioned in this article.

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Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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