Tuesday Turnaround: Don't Netflix and Chill Just Yet
Is it Friday yet?

Happy Tuesday.

Phew. We're really just diving into these earnings, huh?

Before that bell rings and we start diving into Netflix's (NFLX) earnings, let's take a beat to process the top stories from today.

And, just in case you need to take a break, we've got you.

Constellation COO and Canopy Growth CEO Talk Cannabis

Jim Cramer sat down with Bill Newlands, COO of Constellation Brands (STZ) and Bruce Linton, CEO of Canopy Growth (CGC) to talk cannabis.

Now, in case you're living in a hole, cannabis is set to be legalized in Canada on Wednesday, Oct. 16. 

Anyone who watches Cramer knows that cannabis has been one of his favorite topics for a while now. 

He told me that, despite his overall bullishness on some of the deals (cough, cough Constellation and Canopy) in the space, that investors should hold off on buying any cannabis stocks for the time being.  

Cramer even asked if it would ever be possible to get a drink similar to Gatorade, but infused with CBD. The answer? Yes.

The full interview is filled with fascinating topics and is well worth a watch. 

Moving on...

But, let's get down to business to defeat...Oh, sorry, that's Disney. Anyway, it's time to move on to Netflix.

And Now We Present...FADG?

Sorry, Disney (DIS) , it just doesn't have the same ring to it.

Cramer told me that while he initially loved Netflix, he prefers Disney now.

I guess it's time for a new acronym.

Netflix is Real Money's stock of the day. Kevin Curran, a reporter for Real Money, will be taking a deep dive into Netflix ahead of the earnings.

The streaming giant is set to report earnings after the bell Tuesday, Oct. 16. Maybe it'll find other dates to Netflix and chill with, now that Cramer's announced his preference for Disney.

Got Netflix on the Mind

I know we talked about this article already, but I really can't give it enough credit. 

TheStreet's Eric Jhonsa wrote a walk-up to Netflix's earnings. For anyone looking to break down the important parts of the earnings report, look no further. 

Here's what Jhonsa had to say:

Though it had announced a 2018 content budget by the summer of 2017 (it would later be revised higher), Netflix hasn't yet shared a content budget for 2019. Will that change on Tuesday?

In July, Netflix reiterated that it plans to spend $7.5 billion to $8 billion on content this year on a profit-and-loss basis (on a cash basis, spending might be above $12 billion). The company added it plans to further up its content spend in the coming year, but didn't provide details.

Another thing Netflix reiterated in July was that it expects 2018 free cash flow (FCF) of negative $3 billion to negative $4 billion. The reiteration was made even though cash burn during the first two quarters of 2018 totaled only $847 million.

As many readers probably know, interest rates have been moving higher in recent weeks. That impacts Netflix's finances a bit: The company had a modest $4.4 billion in net debt (debt minus cash) as of June, but is still burning cash and has stressed it's comfortable tapping debt markets to cover additional cash outflows in the coming years, as it pushes ahead with its ambitious content-spending plans.

Alright, that's a wrap. Whew. Is it Friday yet?

 

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