This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

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 (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.

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.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NFLX $90.03 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs