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Greenberg: The One Question Not Yet Answered on Netflix

By: Herb Greenberg | 02/24/14 - 12:42 PM EST

SAN DIEGO (TheStreet) -- Here's a reality check: I've been on the wrong side on raising red flags over Netflix's (NFLX) metrics, which have been trumped by a stock that prices the company as a monopoly with pricing power.

Last quarter's strong subscriber growth helped fuel investor confidence.

Now comes the company's deal to pay Comcast (CMCSA) for better service. It's good news for customers because faster service means less annoying buffering.

But as for investors -- one small detail is missing: What are the costs?

I get it: Strategically Netflix may not want to disclose prices until it has negotiated similar deals with all other cable companies and Internet service providers.

Still, analyst after analyst is saying that deals like this will ultimately lower Netflix's costs.

Maybe they will but... until the costs are disclosed, the ultimate impact is anybody's guess.

Reality: Like Amazon (AMZN), investors are willing to cut Netflix slack. That's what happens in markets where all news is good news even before the details are known.

P.S: I'll be doing a live meet and greet and Q/A at TheStreet's New York headquarters this Wednesday. It's in conjunction with my new Reality Check newsletter. It's invitation only. For more information contact ChairmansRSVP@thestreet.com.

-- Written by Herb Greenberg in San Diego

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.

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