Netflix Ambiguity Could Bring Investors Pain

NEW YORK ( TheStreet) -- At some point, the inanity must stop. Because, you just better believe, boy, somebody's gonna get hurt tonight.

It's all fun and games until the stock stops going up ... abruptly. Until somebody gets caught chasing Netflix ( NFLX), without realized or on-paper gains, and gets run over on the wrong side of the trade. Just the way it went down in 2011 when NFLX inanity pegged the height of insanity.

Allow me to list the reasons, in no particular order, why we have hit a dangerous wall with Netflix, the company, and NFLX, the stock.

Earlier this week in Netflix Is Not Coming to Comcast, TWC, I shot down the prior week's reports that ran the spectrum from Netflix In Talks to Become Part of Cable to Netflix Coming to Your Cable Box?

Only two outlets that I know of picked up that story -- Fly on the Wall and Value Walk. That's in stark contrast to the previous week when literally hundreds of media organizations ran with what appear to be false reports.

While I am confident in my sources, I could be wrong. No doubt. But that's not the point. I don't do this to collect kudos when I'm right and stand on a ledge in my underpants when I'm wrong. It's bigger than that.

There's a horrific and very dangerous bias at play in the media when it gushes and fawns over one poorly sourced possibility and completely ignores another. How does a media pump one angle, yet act like other contradictory ones just don't exist. This is part of what I aim to correct or, at the very least, mildly disrupt.

And it only gets worse.

Is Netflix's Latest Rerun Stream 'Exclusive?'

How does Netflix define the word "exclusive?" Will the company ever stop playing a game of semantics with us? Or is the media just getting things wrong?

Case in point: Here's how Variety, a well-respected publication, frames Netflix's recent deal with Showtime to stream reruns of Dexter:
Under the multiyear pact, Netflix will be the exclusive Internet subscription VOD distributor of the series . CBS also will sell TV syndication rights for "Dexter" to a cable network, with details yet to be announced (emphasis added).

So, does this mean that Showtime, a division of CBS ( CBS), will pull full seasons of the show from Apple's ( AAPL) iTunes? Or will it remove Dexter from the Showtime everywhere app?

I have queried Netflix's Investor Relations department -- cc: Reed Hastings -- to find out, but have yet to receive a response.

But, as has been the case for as long as I have been following and dealing with Netflix, they'll find a way to explain away the gray areas they, themselves, (help) create. Exclusive, yes, they might say, but "exclusive Internet subscription . . . distributor," which makes us different than iTunes because you don't need a subscription for that and different from Showtime because you have to be a cable or satellite subscriber to access their platform outside of previews and a free teaser episode here or there.

Or Variety simply got it wrong.

I'll let you know what they write back with, if anything.

Seeking Reed Hastings

Ultimately, I am hoping to sit down with Reed Hastings to talk Netflix and the broad television/Internet television space. I have been after time with the Netflix CEO for more than two years now. For whatever reason, Netflix appears to have a policy -- formal or informal, I don't know -- that keeps it from engaging its detractors. That's counterintuitive to me.

Anyhow, just so you know I'm shooting straight, here's my latest unanswered correspondence to Hastings (note the sidebar where you see a list of emails I have sent to the CEO):

I apologize if you had to squint to read that.

I just want to be as open and transparent as possible. Just like Hastings was when he admitted NFLX stock has gotten ahead of itself thanks, largely, to momentum. Even the latest swath of insider selling couldn't keep it down.

Anyhow, this is easily the most fascinating story in finance I have ever covered. It's being poorly covered pretty much everywhere despite the reality that Netflix is not the pioneering, well-oiled machine the media likes to make it out to be. All it takes is one ambiguous piece of the puzzle to fall further out of place and, like it did two years ago, Wall Street, again, will be last to catch on to this reality.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.

If you liked this article you might like

Time to Sell Netflix and Buy Disney Stock Instead?

Time to Sell Netflix and Buy Disney Stock Instead?

What You Need to Know About the AT&T-Time Warner Trial

What You Need to Know About the AT&T-Time Warner Trial

CHARTS: How AT&T and Time Warner Shares Performed Amid Deal Uncertainty

CHARTS: How AT&T and Time Warner Shares Performed Amid Deal Uncertainty

Next Week's Market Game Plan: Cramer's 'Mad Money' Recap (Friday 3/16/18)

Next Week's Market Game Plan: Cramer's 'Mad Money' Recap (Friday 3/16/18)

Unilever's Move Counters Takeover Buzz; Adobe Sales Are High in the Cloud--ICYMI