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#FinancialTweetoftheDay Expanded - Netflix Spins off DVD Business

@Netflix I do not like the decision to split the business in 2. It will cause brand confusion and unnecessary duplication of operational resources. Following through with this move will continue to batter the stock since a dark cloud regarding future subscriber growth and earnings guidance will thicken even more as a result of the two businesses being split in two.

I guess we all understand why @Netflix suffered a 52% drop in stock price from their 52 week high that was achieved on 7/13/11. I wonder if a move to sell the business is on the table, and this is an effort to trim the fat by “spinning off” the lackluster performing businesses/assets or assets that will cause future margin pressure in an effort to make themselves more attractive to a suitor. Unfortunately, that does not explain why they would venture into renting video games. With their market cap and war chest of cash, it makes more sense to buy Gamefly.com and phase an existing client base into their current framework rather than building an entity from the ground up.

The Netflix decision is a confusing move that shows no relevance or upside at this time. Only the future and time will tell if this was a smart forecast or the unseeding of what was once a strong business model. Regardless, a market cap loss of $7.6B (as of 9:49 am EST on 9/19/2011) from their 52 week high (as of 7/13/11) must be a difficult pill to swallow.

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Written by: Ran Crosby

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Sep 19th, 2011

HULU is up for Sale?

BRAVO!!!! for Hulu mulling offersto sale their service. Reportedly, Yahoo and Apple are in full play for the online streaming service which could fetch $2+ Billion (USD) from the highest bidder.

Earlier this year, Hulu was mulling an IPO that was forecast to fetch a raise near the $2B mark, but with current US and Foreign market turmoil and rapidly growing content licensing cost, it appears that Comcast’s NBC-Universal, Walt Disney Corporation, and News Corp’s Fox division would rather revert back to being the studio and not both the studio and online content provider.

My Thoughts

I like the idea of the sale, but I think the final price will fall somewhere near the $2.5-$3B price range if there is truly an ongoing bidding war. Who should win it? I’m not sure, but both Yahoo and Apple will gain significant relevance from this purchase. I can see Apple expanding it’s reach and rebranding Hulu as Apple TV or even Hulu powered by Apple TV.

Apple TV and iTunes will make it easy for Apple to fuse it’s current product offerings with Hulu. My only concern with Apple winning the bid is will content migrate from a monthly price to a per show price? Hulu is Hulu because they are able to offer users the ability to stream the most popular shows, films and internet content for an affordable price. A per show format would instantly kill this service.

Yahoo on the other hand would become uber relevant again. They would finally have a product that expands their brand without being directly connected to their search engine. Honestly Hulu should have been a Yahoo creation in the first place. Oh wait, that would have required the former leadership to think outside the box during a time when they were more focused on their Billionaire riches and caviar lifestyle than running a true Internet conglomerate. My only concern with a Yahoo winning the bid is their pricing model. For some reason Yahoo is a big fan of charging $19.99 for everything they once solely owned. If the current management team wins this bid and tremendously hikes prices up, it will be all for not. Hulu will crumble for sure and become something.yahoo.com powered by someone else anyway

The Markets and Internet World will be watching this battle closely. Who will win? Yahoo, Apple or possibly a dark horse like Facebook will ride in and shock everyone. Let’s pause for a second…. I actually like a Facebook-Hulu relationship. If Facebook does buy Hulu, they can pretty much guarantee a huge IPO that will offer technology investors a sustainable, fundamentally sound foundation.

Thanks for reading and I will post an update once the deal is done.

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posted by Ran Crosby

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Jul 22nd, 2011

Watch and Track How I Invest

You constantly hear me tweeting about the markets, economy and politics, but I’m sure many have asked this question: “Does he actually know what he’s doing?” Well the only way that can be answered is buy tracking my performance. Before I continue here’s a disclaimer:

OURBLOC.com is not affiliated with UpDown.com. The investment decisions and moves that Ran Crosby makes while playing a virtual stock game are not to be considered a recommendation nor a strategy suggestion. His thoughts, views, and opinions are solely his own and may or not the same for OURBLOC and Playtionics Global, LLC. Seek the guidance of a licensed financial professional before making actual investment decisions.

Had to appease the lawyers. UpDown.com conducts a virtual stock game where one can manage a $1,000,000 portfolio with a goal to consistently outperform the S&P 500. Below is my portfolio:

Learn more

This will sit in the sidebar for all to view and comment if you like. Beginning August 1, 2011, OURBLOC.com will host a group on UpDown.com for all to join. Go heads up against me and let’s see who will win. More details are forthcoming.

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Jul 1st, 2011

Financial Tip of the Day: Rushing Financial Decisions

Rushing financial decisions is the easiest way to kill a personal balance sheet. Everyone knows that we live in an instant gratification society and this attitude has placed many in a financially precarious position. For example, most make buying decisions based on popularity and not facts resulting in a hemorrhaging portfolio. Another example, cleaning out your savings, retirement and investment accounts to purchase a home, so one can say “…I’m a homeowner”.

I’m not instructing you to not purchase anything, but I am asking you to do your due diligence and separate emotion when making a financial decision. I understand that is easier said then done for many, but would you rather have all that you desire and financially regret it later…or would you rather have some of your wants while maintaining a strong balance sheet?

Final point…even though our emotions, circle of influence or the wonderful salesperson that says “..this may not be here tomorrow, so you must act now” will cause us to act now…do not fret it will be there tomorrow. If it’s not, you’re alive today without it right? Stop rushing and start building true equity in your financial life.

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written by Ran Crosby

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Mar 25th, 2011

Financial Tip of the Day

Never marry a stock. Set an in and an out. Falling in love with it will only lead to missed opportunities. Either missing a good out or missing money that you invested in the position.

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Mar 23rd, 2011

Financial Question of the Day: Resale Value

When buying a car or a house, why is a major deciding factor the resale value? When you go and buy a shirt or a pair of pants, do you ask yourself “What will I receive when I donate or sell this article of clothing to a consignment shop?”

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Mar 20th, 2011

Breaking News: ATT Buys T-Mobile USA for $39B

Shocking but definitely a great move for AT&T (T) Mobile which has taken a shackling in recent months from Verizon (VZ). Both Board of Directors have approved the transaction. Once the deal closes, AT&T will immediately assume control of T-Mobile’s network assets.

The question is will AT&T be required by the FCC to spin off some of the assets in order to achieve regulatory approval? Only time will tell, but this is definitely a huge move for the wireless industry.

Sprint is now on the clock

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Mar 20th, 2011

Financial Tip of the Week: You Should Never DIY Your Finances

DIY is good for building a birdhouse or painting a house, but not good for your finances. Yes we can read books or watch TV shows all day, but if it’s not your day to day, how will you truly prepare for the next shift?

A knowledgeable Financial Advisor helping your household prepare for the Future as well as the Present, is a must have. Granted not every advisor is the same, so do your homework. There are a lot of former pizza delivery guys and used car salesmen who are now “career changers” selling financial products. Not saying they can’t do the job; Just DO YOUR HOMEWORK.

Make the investment and find a strong, solid Financial Advisor to put on your team.

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Tip posted by Ran Crosby

*Disclaimer* The Financial Tip of the Day is not advice and the expressed thoughts of Ran Crosby do not represent the thoughts and actions of OURBLOC.com. Consult a financial professional before implementing any Financial Tip of the Day.

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Feb 22nd, 2011

#Financial Tip of the Day: A Vehicle is More of an Asset than a House

#Financial Tip of the day: Are vehicles more of an asset than a house? A vehicle can get you to and from opportunities that will either sustain or increase your earning potential. A home is merely a tool to leverage (debt, loans, whatever you want to call it; it’s still debt).

I know a few of you are disagreeing with my point right now, so let me ask you this question: If the electricity goes out in your home, will that stop you from going to work? Now ponder this for a moment, if your car stops working will you still be able to make it to work? #foodforthought

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written by: Ran Crosby

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Feb 17th, 2011