Netflix Will Be a Monster as Long as Millennials Love Sitting on Their Couches

 | Jul 17, 2017 | 5:22 PM EDT
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Remember all that junk on investing you learned in college? Toss it in the trash, at least when it comes to Netflix (NFLX) .

Shares of the video streaming king ripped to an all-time high after blowing it out of the water with respect to second-quarter results on Monday. What was already a pricey stock is about to become that much richer, which must be killing the well-known Netflix valuation bears on Wall Street. 

Although Netflix didn't impress on earnings per se, it checked all the boxes on what it needed to do to keep momentum investors enthralled:

  • Strong U.S. subscriber growth. 
  • Strong international subscriber growth. 
  • Execs talked strongly about how Netflix continues to upend its industry. 
  • Company made money (always an unknown when it comes to a tech company investing in its future). 
  • Signaled more interesting things ahead (content, growth plans, etc.). 

Bottom line on Netflix: Shorting the stock will likely continue to be a losing proposition as long as the company continues to impress Wall Street. And why is the company capturing minds out in the financial district? Pretty simple. There is a fundamental trend among millennials to sit home after work and watch movies. Whether it's due to sheer exhaustion, or a preference to cut the cord, this large group of people is consuming massive amounts of on-demand content. That will probably only strengthen, believe it or not, and push Netflix to even higher heights of valuation insanity. 

Love me some on-demand Rocky 1.

Reed Hastings has to be happy.

What's Hot on TheStreet

Elon Musk keeping it real for a change: Tesla's (TSLA) Elon Musk just gave the obsessed bulls on his company's future something to strongly consider, TheStreet reports.

Speaking at the National Governors Association summer meeting in Rhode Island on Saturday, Musk reiterated that shares of Tesla are trading at a level "higher than we have any right to deserve" based on optimism about the company's future.

"Those expectations sometimes get out of control," Musk added. Meanwhile, TheStreet reports Tesla could be at risk of a nasty surprise soon: the end of tax credits for electric cars in the U.S.

Musk seems to have regretted his stock price comments -- he took to Twitter in the afternoon to clarify his comments

Procter & Gamble under siege: Peltz's Trian Fund Management plans to launch a fight for a board seat at Procter & Gamble (PG) , making it the largest company to face a proxy battle, The Wall Street Journal reported Monday.

Trian, which owns about $3.3 billion of P&G stock, is said to be seeking a single board seat for Peltz at the company's annual meeting that could take place in October. P&G has reportedly been in talks for five months, but the company is said to have rejected naming Peltz as a director last week.

Sales at P&G -- and its stock price -- have stalled due to pricing pressure and competition.

As TheStreet's Ron Orol reported in June, look for the consumer packaged-goods company to announce plans for spinoffs, sales or even a swap out of business units. If major M&A doesn't come soon, a Trian director-battle or white paper chock-full of activist demands could be next.

And Trian likely will demand significant M&A activity. Spinoffs and other major deals often follow when the activist investor acquires a large stake. Trian and other activist fund managers often push to have large companies break themselves up with the goal of extracting value by focusing the market on various parts of a business that might be hiding inside confusing conglomerate structures.
 
Here is what Orol is currently reporting.
 
Behind the scenes: TheStreet's Tracy Byrnes has a great talk with Carly Fiorina for our new web series "Alpha Rising." Fiorina was the first first woman to head a Fortune 500 company when she became CEO and president of Hewlett-Packard (HPQ) and she was the first female officer at AT&T (T) . Must-watch stuff.
 
Boo Apple bears: Deutsche Bank analyst Sherri Scribner reiterated a "hold" rating for Apple (AAPL) and raised her price target for the tech giant to $132, up from $130.

Scribner said expectations for Apple are too high, warning investors that they might be disappointed with iPhone sales growth in 2018 and 2019.

A market overly optimistic on future sales is "ignoring the fundamental challenges Apple faces in the smartphone market," Scribner wrote. Those challenges include saturation due to elongated refresh cycles, declining share, increased Chinese competition and a growing secondary market.

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