Nearly 14% of Netflix (NASDAQ:NFLX) stock was sold short heading into the Q1 earnings report. The bad news for these bears: Shares rallied more than 20% (again!) after the streaming sensation reported blowout earnings.
Revenue climbed 17.7% to $1.02 billion while per-share earnings rose to $0.31, well above the $0.18 analysts were calling for. What's more, 3 million new members joined around the world, reaffirming Netflix's position as the leading streaming supplier, says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following interview with The Motley Fool's Erin Miller.
Guidance also came in ahead of expectations, while revenue is expected to once again be around $1 billion or slightly above. Meanwhile, Coinstar (NASDAQ:OUTR) and Verizon (NYSE:VZ) are still trying to get traction for Redbox Instant as Hulu's owners struggle with a lowball offer for the service. Among competitors, only Amazon.com seems like a genuine threat. Call Netflix expensive if you'd like, but selling the stock short is just too dangerous, Tim says.
Can anyone beat Netflix? Please watch this short video to get Tim's full take, and then leave a comment to let us know whether you'd buy, sell, or short Netflix stock now, and why.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix at the time of publication. He was also long Jan. 2014 $50 Calls on Netflix. Erin Miller had no position in any stocks mentioned. Check out Tim's Web home and portfolio holdings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.