Netflix (NFLX +1.15%) CEO Reed Hastings is getting the last laugh, making his first post on Facebook in nearly two months. He's linking to a Herb Greenberg article from 2005 that detailed Wedbush Morgan analyst Michael Pachter's recommendation that investors short the then-leading DVD rental service with a $3 price target.
Hastings' comments are brief but to the point: "oh well. no one is right all the time."
Why is Hastings gloating now? The stock's been a 110-bagger off that $3 target that never came. However, the reason that the video service's colorful CEO is posting this now is likely tied to the other part of Pachter's call. See, he had Netflix nemesis Blockbuster rated as a buy at the same time that he was advising investors to bet against Hastings.
Ouch!
Blockbuster eventually buckled and its remains were purchased by DISH Network (DISH +0.00%) two years ago. DISH Network announced yesterday that it would close the remaining 300 domestic stores as it winds down physical rentals.
Greenberg's also a good sport. His column at the time didn't call out Netflix as much as it passed on Pachter's case for shorting the stock. However, he's open to taking Hastings down a notch in this moment of bravado.
$NFLX's Reed Hastings on $FB dredges up blast from my past, saying, "Oh well. No one is right all the time." He's right! Qwikster anyone?
-- Herb Greenberg (@herbgreenberg) Nov. 7, 2013
That's an equally clever shot, but we can't forget that Hastings was smart enough to realize that Qwikster was a mistake, nixing it before it was even implemented. Blockbuster was a disaster that slowly swallowed Carl Icahn, DISH Network, and some guy in Duluth wondering what to do with his DVD copy of Grown Ups 2.
Netflix shorts have a funny way of ignoring the growth and the intangible moat that grows more impenetrable by the quarter. Hastings was able to talk Whitney Tilson out of his bearish position two years ago, but there's been no shortage of naysayers who have been skeptical all the way up.
Greenberg gets a free pass for his 2005 MarketWatch article, but there was that CNBC.com column 13 months ago in which he warned about Netflix's subscriber growth and the Chanos Rule.
Coining the rule after perpetual worrywart Jim Chanos, Greenberg argued that the rule sees growth slowing when a premium product maker or service provider sells 25 million to 30 million units or has that many subscribers. That was where Netflix was then. It surpassed 40 million accounts this past quarter, and the stock has gone on to quintuple in value since the column.
Blockbuster's gone. Netflix is here. Opinions live on to be regurgitated forever.
