Netflix - Episode 1: The Dump - Episode 2: The Pump

Disclaimer: I’m a noob so please chime in any additional information I should include, as well as any viewpoints that you have.

The play idea - Netflix acquiring companies creates an opening to buy long positions. They are expected to close a deal with Scanline VFX sometime in Q1. In response to this news Netflix dumped today. I have a couple working theories currently.

(I’m not experienced enough to know the most likely scenario.)

  1. Netflix will continue trending up through Q1 until the finer details of the acquisition are announced and then dump again before regaining a foothold.

  2. Netflix will trend sideways and dump in Q1 when the details are announced before regaining foothold.

  3. Netflix will trend up through Q1 and then continue to trend up when the deal is announced because its priced in and stocks only go up lel.

11/22/2021 - NFLX News :
Announces deal to acquire Scanline VFX by end of Q1 2022
Here is the blog post from the vp:
https://about.netflix.com/en/news/bringing-more-vfx-magic-to-our-members-with-scanline-vfx

And here is the article from the wsj
https://www.wsj.com/articles/netflix-to-buy-special-effects-firm-behind-stranger-things-game-of-thrones-11637607167?mod=wsj_RHF

Here is the link to Scanline that I ripped from the blog:

the 11/22/2021 trading day in response to the news

On sept 22 Netflix made a similar announcement reacquiring Roald Dahl Story Company
The stock saw similar movement which resulted in small dump and a slow reclimb.
https://about.netflix.com/en/news/netflix-acquires-iconic-roald-dahl-story-company

However I found an article from the 21st that says they are in talks:
https://www.reuters.com/business/media-telecom/netflix-talks-buy-childrens-classics-author-roald-dahls-works-bloomberg-news-2021-09-21/

as well as
September 28th:
Night School Studio Joins netflix

september chart:
please note that both of these headlines occur in in the last half of the month. There is a run up on the 20th before the announcement and then it trades sideways for a little while before breaking back out. And it might also be worth noting that the most recent Scanline announcement occurred in the last half of the month.

Here is a list of all Roal Dahl Story Company’s
Books, stories, curated collections, and other published works

  1. The Gremlins (1943)
  2. Over To You (1946)
  3. Some Time Never (1948)
  4. Someone Like You (1953)
  5. Kiss Kiss (1960)
  6. James and the Giant Peach (1961)
  7. Charlie and the Chocolate Factory (1964)
  8. The Magic Finger (1966)
  9. Fantastic Mr Fox (1968)
  10. Charlie and the Great Glass Elevator (1972)
  11. Switch Bitch (1974)
  12. Danny, the Champion of the World (1975)
  13. The Wonderful Story of Henry Sugar and Six More (1977)
  14. The Enormous Crocodile (1978)
  15. My Uncle Oswald (1979)
  16. The Twits (1980)
  17. George’s Marvellous Medicine (1981)
  18. Revolting Rhymes (1982)
  19. The BFG (1982)
  20. Dirty Beasts (1983)
  21. The Witches (1983)
  22. Roald Dahl’s Book of Ghost Stories (1983)
  23. Boy: Tales of Childhood (1984)
  24. The Giraffe and the Pelly and Me (1985)
  25. Two Fables (1985)
  26. Going Solo (1986)
  27. Matilda (1988)
  28. Rhyme Stew (1989)
  29. Ah, Sweet Mystery of Life (1989)
  30. Esio Trot (1990)
  31. The Vicar of Nibbleswicke (1991)
  32. The Minpins (1991)
  33. Roald Dahl’s Guide to Railway Safety (1991)
  34. My Year (1991)

Play scripts and film screenplays

  1. The Honeys (stage play, 1955)
  2. You Only Live Twice (film screenplay, 1967)
  3. Chitty Chitty Bang Bang (co-wrote film screenplay, 1968)
  4. The Night Digger (film screenplay, 1971)
  5. Willy Wonka and the Chocolate Factory (co-wrote film screenplay, 1971)

Anthologies and collections co-written by Roald Dahl or inspired by his writings

  1. The Roald Dahl Cookbook (1991)
  2. Revolting Recipes (1994)
  3. The Roald Dahl Treasury (1997)
  4. Even More Revolting Recipes (2001)
  5. Songs and Verse (2005)
  6. More About Boy (2008)
  7. Completely Revolting Recipes (2009)
1 Like

(Written this thinking it was based on the current actualities)

My thinking points for a bear case for 2022 and ongoing Netflix are

  • People have been in lock down, possibly consuming content faster. For these reasons people may stop using it faster. Or go to different services that have different offerings.
  • Pandemic is coming to an end (a guess, but I feel like omicron is the beginning of the end of the pandemic), meaning people will be spending time differently.
  • CPI is becoming higher, people have less money to spend on services, and Netflix is upping its subscription price.
    They will probably lose more subscriptions over time because of this, and gain less of them. Or potentially lose some to competition.
  • Netflix has increasingly more competition, and I don’t see this stopping anytime soon.

No deep analysis here, just my sentiment. Feel free to contradict me, I’d like to know if I’m wrong on any of these points.

1 Like