NEW YORK (TheStreet) -- Of course, this is how technology executives get paid. By exercising stock options. And, as his 10-year employee options begin to vest monthly, Netflix (NFLX) CEO Reed Hastings is back to unloading millions of dollars' worth of NFLX stock.This does not come as a surprise. Netflix told us it was coming in its January 23, 2013 letter to shareholders:
Starting in July, Reed has some 10-year employee options expiring every month, and he plans to sell upon forced-exercise. He has no other sales planned.Some. I love it. Try 15,238 shares underlying options for the June 24 transaction. I guess words such as "some" are merely relative terms to guys like Reed Hastings. While Hastings took a one-year hiatus from selling stock, other executives did not. Dig Theodore "Hollywood" Sarandos. Netflix's content golden boy has been raking it in, exercising options at a pace vaguely reminiscent, but not even in the same ballpark as Hastings' epic multi-year run that ended, temporarily, in May 2012. You can review a complete history of NFLX insider sales at the SEC's Website. But this is nothing new. This whole story. We saw it happen, following an eerily similar pattern, in 2011. You know, when investors and irresponsible Wall Street analysts ignored all that was wrong with Netflix, running the stock past $300 on the basis of nothing but Reed Hastings' charm and spin. And now, in 2013, some of the same people make the same reckless mistakes again, ignoring critically important issues such as Netflix's refusal to report subscriber churn data, Netflix's refusal to report the number of people who actually watch its (apparently) highly-anticipated original series, $5 billion -- at a minimum -- in off-balance sheet debt, share dilution to help service that debt and the loss of wildly popular Kids TV programming in favor of window dressing. Like the latest: A Tuesday press release announcing a deal that brings Mako Mermaids to Netflix, "exclusively," in July. Mako Mermaids. This is the type of content Netflix claims will catapult it into competition with Time Warner's ( TWX) HBO? Did you catch the latest episode of Real Sports Tuesday night? Have you seen the viewing numbers on original series such as Game of Thrones, True Blood and Girls?
NFLX's most impressive asset is the ability to craft a press conference that is inaccurate but indeed factually correct. How else can they generate a billion in market cap from a Dreamworks Animation (DWA) presser that actually adds $3 per share to costs and likely does not include 300 hours of new content annually (we think it's more like an average of 60 hours per year) with the bulk of the deal reruns by 2016?Where will Andy Hargreaves of Pacific Crest run when his prediction of 50 to 70 million subscribers for Netflix doesn't come true? (He made this call on CNBC Tuesday). Even if NFLX hits that number, Hargreaves falls for the same trick Hastings used in 2011 -- a focus on raw subscriber numbers to distract from the real issues. Hargreaves might want to consider doing his job first, becoming a television star second. Where will Hargreaves disappear to? Maybe the same place other NFLX pumpers go when things implode. Wherever one-time Goldman Sachs analyst Ingrid Chung went after her embarrassing 2011. Follow @rocco_thestreet -- Written by Rocco Pendola in Santa Monica, Calif.