The Netflix (NASDAQ:NFLX) bears are sinking to unbelievable depths these days.

Citi analysts Mark Mahaney and Tony Wible are reiterating their sell rating on the DVD-by-mail rental pioneer with a warning that operating profits could be slashed by 67% if a postal surcharge is slapped on the company's pesky return mailing envelopes.

The rectangular mailers often get stuck in the Postal Service's automated sorters, forcing postal workers to sort them manually. An audit by the USPS Office of the Inspector General disclosed that 70% of the return mailers aren't going through. The office's recommendation is a $0.17 surcharge on each return mailer to offset the additional $21 million in processing labor being incurred by the postal department.

It sounds serious. In fact, it's brutal when you do the math. A typical subscriber goes through four or five movies a month, leading Citi to project that operating profits per subscriber would plummet from $1.05 to $0.35 per member.

Run for the hills? Short Netflix like it's the Miami Dolphins against the New England Patriots in three weeks?

Hold on a second. What happens when costs rise at Chipotle (NYSE:CMG)? Naturally raised "food with integrity" doesn't come cheap. What happens when Starbucks (NASDAQ:SBUX) is hit with higher coffee-bean prices? Those Colombian java pellets can get pricey. Yes, they pass the costs on to the consumers.

Why would Netflix stomach a blow that wipes out two-thirds of its operating profits? It's more likely that Blockbuster (NYSE:BBI) will be in a bigger world of hurt. It can't turn a profit on its Total Access service. It's saddled with debt. If its mailers are jamming machines too, it will be --

What's that? Blockbuster's mailers aren't getting stuck? The Citi analysts confirm this. Those mailers are square, without the paper-thin edge Netflix mailers have that trips up the postal sorting automatons.

So Netflix needs to reshape its mailers. It's hip to be square, Netflix. One quick tweak and everyone's happy, sparing Netflix the need to take a weed whacker to its income statement. 

OK -- why not just say that from the beginning? Because the Citi analysts are bearish on Netflix -- and they have a buy recommendation on Blockbuster. They're using this flimsy non-news non-event as a platform for a pair of stock reiterations.

I am a Netflix shareholder, but I'm far from the pom-pom-toting type. I ruffled a few feathers last month, suggesting that the market for DVD rentals by mail peaked back in June. I have also questioned if Netflix will continue with its digital initiative as well as it has been, once companies like Apple (NASDAQ:AAPL) and (NASDAQ:AMZN) improve their offerings on that end.

But even a cynic like me has to laugh at the reasoning here. Peddling fear is one thing. Peddling needless fear is something else entirely.  

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