NEW YORK ( TheStreet) -- I'm not certain why it makes me so angry -- well, maybe not angry, rather something like angry -- but I simply cannot let the line most of the media and Wall Street totes on Netflix (NFLX - Get Report) slide.
Given the work I have done on Netflix, which includes speaking with a large number of high-level folks from the Hollywood and New York entertainment capitals, I guess I feel I would be negligent if I did not consistently sound the alarm by countering the same sort of mindless euphoria we witness pre-implosion in 2011.
On Tuesday, I took to my Twitter account and ended up spewing the most sense anybody has ever made of Netflix, at least from an investors' point of view:
Let me take you through this -- Netflix puts over $6 billion off balance sheet just to show investors it's "profitable." (1/3) ...— Rocco Pendola (@Rocco_TheStreet) October 15, 2013
But, worse yet, it needs to use contribution profit to show that profit. (2/2)— Rocco Pendola (@Rocco_TheStreet) October 15, 2013
And Sony goes w/ Netflix not because Netflix is some great partner, but because Netflix pays way too much money for content (3/3).— Rocco Pendola (@Rocco_TheStreet) October 15, 2013Less than 420 characters and yes ...
Those last three Tweets are pretty much the heart of the NFLX story that, literally, just a handful of people are telling. Stunning. $NFLX— Rocco Pendola (@Rocco_TheStreet) October 15, 2013Explanations that support the contents of those Tweets saturate my article history at TheStreet Most recently I expose the real dynamics that underlie both the deal Netflix cut with Sony (SNE) and Reed Hastings' renewed push to make Netflix part of the cable establishment. I passionately get into the off-balance sheet and contribution profit/margin issues everybody wants to ignore, discount or gloss over as they ride the magic carpet ride of a pure and mindless momentum stock in ... Media Darling Netflix to Crush $300 Again And ... Netflix: Exposing Wall Street's Incomplete Bull Case. In that last story, you'll see video of a CNBC hit I did. All I wanted was for the analyst to do a better job making his case. To tell a complete story. To provide the alternative scenarios he includes in his research notes to clients, but omits from television appearances seen my far more people. Because, there's no doubt, I could be wrong about Netflix. That said, I wasn't in 2011. And I sure don't think I am wrong this time around. I get upset because, for every person who got in NFLX stock at $60 ( a move I suggested back in July 2012), I know there are probably multiple people who feel like they missed out, make themselves buy into the bull case and chase this thing where it is now. That's dangerous. That approach can cause tons of pain. Worst case scenario -- it can shatter dreams by crushing retirement accounts and college funds. I'm telling you, don't believe Reed Hastings' hype. Or at least consider it more critically. He's already rich. Another fall from $300 to $60 isn't nearly as much sweat off of his back as it could be yours. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.