Dave
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"It's tough to make predictions, especially about the future." Yogi Berra
Posts: 4,093
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Post by Dave on Jan 30, 2020 3:45:08 GMT -8
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,426
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Post by chinacat on Jan 30, 2020 6:22:17 GMT -8
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4aapl
Moderator
Posts: 3,625
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Post by 4aapl on Jan 30, 2020 7:04:47 GMT -8
I'm not so sure Apple has a reason to split the stock, with fractional trading becoming more widespread. It's the potential psychological benefits that are hard to quantify, especially since many splits are done when there is already momentum. Fidelity Announces Fractional Shares TradingAAPL was making a run at green for a bit there. But the day is still young, as is the week of often volatility following earnings. And that's without market/global influence. Long week, it will be.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,426
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Post by chinacat on Jan 30, 2020 8:03:33 GMT -8
I am totally mystified by this. Either those partial shares are going to be a minuscule part of your portfolio, and will therefore be a negligible contributor to your returns, or you aren’t really in a position to be investing at all. I apologize if this seems like a cruel opinion from someone who has been extraordinarily lucky, but perhaps I am missing something.
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walterwhite
Member
"I am the one who knocks!"... Albuquerque, NM
Posts: 346
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Post by walterwhite on Jan 30, 2020 8:18:23 GMT -8
ok, this was yesterday, but deserves a repost in case anyone missed it:
Dur hur, being a simple caveman, I don’t understand Netflix’s business model, so I’ll have trouble expressing myself polysyllabically. But I’ll try to get my abnormal 🧠 to emit some intelligible grunts. While Netflix reports that it turns a profit in GAAP-obscured numbers, it is actually borrowing billions to do so. So in real world cash flow numbers, what this means is that Netflix BORROWS $3B annually to report $1.8B in “profit.” Netflix has negative cash flow, and will for the foreseeable future. All the while it is accumulating billions of debt. Netflix’s hope is that this pay billions now, profit later Ponzi scheme will eventually become profitable at a time when all the major (already profitable, with decades of stockpiled content) studios are starting their own streaming services, making Netflix less relevant, not more (even Netflix has admitted this increases competition in its 10Q). Netflix’s market share has INVERTED, going from 91% in 2007 to 19%, and its subs growth is CRATERING (down like 67% yoy, missing its own guidance by 50%). Netflix has even cooked the books on what it counts as a viewer: Anyone who has watched for TWO MINUTES. Man, must be some great shows if a “viewer” watches for 2 minutes. Tim Cook, Man of 40% Gross Margins, and an installed base of 1.5 BILLION users, this company without a single original series I can recall off the top of my head since it lost Friends, which is burning through billions in cash like it’s Venezuelan Bolívar can all be yours for, ONE HUNDRED AND FIFTY-FOUR BILLION DOLLARS* *market cap (billions of debt not included in retail price). Grunt. Me scared of 🔥. jd and i may disagree on some things, but this was f***ing brilliant!
hope it shuts down the nonsense talk of apple buying netflix...
and please... i beg no one suggests apple buy tesla! i'm an apple shareholder and want my cash towards buybacks or dividends, thank-you-very-much if anyone's so keen on netflix or tesla, go buy NFLX and TSLA otm calls on margin, and let's check back in a year, yah?
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Post by ifan on Jan 30, 2020 9:23:33 GMT -8
I am totally mystified by this. Either those partial shares are going to be a minuscule part of your portfolio, and will therefore be a negligible contributor to your returns, or you aren’t really in a position to be investing at all. I apologize if this seems like a cruel opinion from someone who has been extraordinarily lucky, but perhaps I am missing something. I've recently been cost-averaging a large chunk of cash into the SP500 and fractional shares for an ETF would have been useful. Instead of buying 30 shares of IVV and ending up with some odd purchase amount, I could buy exactly $10,000 a pop. I prefer that. Or let's say you wanted to buy $50,000 of apple stock, but due to the share price you were only able to purchase 154 shares instead of 155. Instead of the extra dollars sitting there doing nothing, they'd be invested in AAPL. It all adds up over time! My first $700 purchase of Apple is now worth $22,000+.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,426
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Post by chinacat on Jan 30, 2020 9:29:36 GMT -8
I am totally mystified by this. Either those partial shares are going to be a minuscule part of your portfolio, and will therefore be a negligible contributor to your returns, or you aren’t really in a position to be investing at all. I apologize if this seems like a cruel opinion from someone who has been extraordinarily lucky, but perhaps I am missing something. I've recently been cost-averaging a large chunk of cash into the SP500 and fractional shares for an ETF would have been useful. Instead of buying 30 shares of IVV and ending up with some odd purchase amount, I could buy exactly $10,000 a pop. I prefer that. Or let's say you wanted to buy $50,000 of apple stock, but due to the share price you were only able to purchase 154 shares instead of 155. Instead of the extra dollars sitting there doing nothing, they'd be invested in AAPL. It all adds up over time! My first $700 purchase of Apple is now worth $22,000+. Thanks, that certainly makes a lot of sense. I guess I was more focused on "customers who either can't or don't want to buy entire shares of high-priced stocks like Amazon or Google.
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JDSoCal
Member
Aspiring oligarch
Posts: 4,182
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Post by JDSoCal on Jan 30, 2020 9:44:21 GMT -8
Guys, not everyone is rich of course, but I think rich vs poor is a mindset. I give my students extra credit for opening an IRA or retirement account, and tell them even if they put in the $6 they were going to spend on a Starbucks latte, that's $6 more towards their financial independence. With the brokerages all cutting or eliminating their trade fees, anyone can start thinking and acting like a rich person. I harp on my students to build net worth, not debt. Start with $6 and become a hundredaire, and then thousandaire, on to millioniare. Just get them into the mindset early. How many of you started investing at 19? I did, not that I made much money back then. But I learned a lot. I'm going to tell my students about fractional share trading today, and show them this graphic I found on Twitter:
Cheers to the rich mindset and the AAPL longs.
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Post by nwjade on Jan 30, 2020 10:08:51 GMT -8
Guys, not everyone is rich of course, but I think rich vs poor is a mindset. I give my students extra credit for opening an IRA or retirement account, and tell them even if they put in the $6 they were going to spend on a Starbucks latte, that's $6 more towards their financial independence. With the brokerages all cutting or eliminating their trade fees, anyone can start thinking and acting like a rich person. I harp on my students to build net worth, not debt. Start with $6 and become a hundredaire, and then thousandaire, on to millioniare. Just get them into the mindset early. How many of you started investing at 19? I did, not that I made much money back then. But I learned a lot. I'm going to tell my students about fractional share trading today, and show them this graphic I found on Twitter: Cheers to the rich mindset and the AAPL longs.
Love that you're teaching this, there are few ways to real wealth aside from being an investor.
BTW, I bought my first car at age 16 and my first house at age 29 both by selling stock.
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4aapl
Moderator
Posts: 3,625
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Post by 4aapl on Jan 30, 2020 12:03:50 GMT -8
Guys, not everyone is rich of course, but I think rich vs poor is a mindset. I give my students extra credit for opening an IRA or retirement account, and tell them even if they put in the $6 they were going to spend on a Starbucks latte, that's $6 more towards their financial independence. With the brokerages all cutting or eliminating their trade fees, anyone can start thinking and acting like a rich person. I harp on my students to build net worth, not debt. Start with $6 and become a hundredaire, and then thousandaire, on to millioniare. Just get them into the mindset early. How many of you started investing at 19? I did, not that I made much money back then. But I learned a lot. I'm going to tell my students about fractional share trading today, and show them this graphic I found on Twitter: Cheers to the rich mindset and the AAPL longs.
Even better, get compounding into their mindset. I was already saving and investing, making my first investment in AAPL 6 months before starting at Motorola. But shortly after starting there, our group of 40 recent college graduates were given a lunchtime presentation on investing and the 401k. The part that stuck the most, though I don't actually see this here on page 1 of my Finances notebook, is comparing the results of 2 accounts, one that invests $5k/year for the first 5 years, and then stops adding money. The other waits 5 (or 10?) years, and then invests $5k/year for the next 30-40 years. The second never catches up with the first. I forget the exact exact statement, but that's the gist of it. A back of the envelope calculation yields a bit over $500k 40 years out (~age 66) if using 8%, or over $1M if using 10%. Throw those into a spreadsheet and work it out. Encourage getting that investing going, especially in a 401k with matching. I figured that small amount was my anti-catfood retirement plan, that even if I lost all other investments, this account would allow me to retire at a traditional age. Instead, we rolled this safety account over into a Roth back in 2007, paid the taxes on it, invested it in AAPL, and now that smaller account is still plenty to retire on, a few decades before tradition. Nice! Good luck with the kids! I hear they are distracted by shiny objects
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4aapl
Moderator
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Post by 4aapl on Jan 30, 2020 12:26:09 GMT -8
I love reading all the AAPL analysis here - but it seems like a number of people don't understand the current Netflix business model. As of a few years ago when all the content/studios woke up - they slowly started dropping their distribution deals with Netflix. Netflix saw this coming and became a massive studio themselves, spending billions of dollars annually on unique content. I'm not sure if any studio (even Disney?) is spending more than Netflix will be in 2020 on original content. They aren't just a distributor/middleman anymore...they are the content creator. The largest in in the world, I believe. Another Netflix advantage right now is their ability to create localized content. Australia, Japan, etc, all have amazing content created just for them. Apple can no longer just go out and license content for cheap, like Netflix used to do. The market is too competitive and the rates for old hit shows is absolutely outrageous. Google South Park streaming rights, Seinfeld, Friends, etc. The only solution is for Apple to buy smaller studios (like the current MGM rumor.) That being said...I don't think Tim Cook will ever make a purchase as big as Netflix. The time to buy was 5-10 years ago. I don't think it would be a smart decision at this point. Apple will instead ramp up spending on content themselves. It will take 10+ billion a year to be competitive unless they can be extremely smart about finding hits with smaller budgets - aka the pre-ATT purchase HBO model. Thanks ifan! Unlike JD, I guess I didn't have a good grasp on the current offerings of content from Netflix. Years ago, when we lived close to their headquarters in Los Gatos and they were still flinging DVDs, we used them a few times. If I timed it right, I could get the DVD, rip it for a little time offsetting enjoyment, and get it back to the mail lady while she was at the next set of condos. That could get it down to 3 turns a week. Optimize Optimize Optimize. These days I just don't have much time or desire to watch movies, and generally default to a minimum score of 6.0 on IMDB, even when getting it for free at the library. We're aware of the strange and cycling collection of movies on Prime, and sometimes the kids just watch so many trailers and bicker about what to watch that they don't get to watch anything. The easier route often is to just pick up a RedBox DVD down at the store. I didn't know that Netflix had slowly devolved to having a lot less content from other providers. Thanks for sharing
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Post by duckpins on Jan 30, 2020 12:55:14 GMT -8
"I am totally mystified by this. Either those partial shares are going to be a minuscule part of your portfolio, and will therefore be a negligible contributor to your returns, or you aren’t really in a position to be investing at all. I apologize if this seems like a cruel opinion from someone who has been extraordinarily lucky, but perhaps I am missing something."
Seems like marketing. One could just buy cubes and get exposure. Or even better the triple cubes. TQQQ.
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4aapl
Moderator
Posts: 3,625
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Post by 4aapl on Jan 30, 2020 13:17:41 GMT -8
I am totally mystified by this. Either those partial shares are going to be a minuscule part of your portfolio, and will therefore be a negligible contributor to your returns, or you aren’t really in a position to be investing at all. I apologize if this seems like a cruel opinion from someone who has been extraordinarily lucky, but perhaps I am missing something. A few accounts that we have, such as a couple SEP IRAs, are very low in value. There were a couple years after setting them up that I didn't even bother putting them in anything, though they all got invested at some point. But even now, if they have maybe 20 shares of AAPL in them ($3k at $150), they would be kicking off dividends of around $60/year. Maybe that's $120 after 2 years, plus $15 from unutilized initial funds. Currently I just let that $135 sit there. Until recently there were trading costs that would eat into that if I bought something. But now, and with fractional shares, maybe I buy .45 of a share of AAPL. So even the theoretical $6k account, which is more than I opened my first stock account with, could be aided by fractional shares. Progress? Maybe. At least we're not dealing with fractions for the trading prices anymore. 1/4's and 1/8's were one thing, but 1/16's, 1/32's and 1/64's got a bit tedious.
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platon
Member
"All we can know is that we know nothing. And that's the height of human wisdom.? Tolstoy
Posts: 3,944
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Post by platon on Jan 30, 2020 13:24:15 GMT -8
AMZN up $240.00 after hours . I still have shares, did you keep yours JD?
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Post by plcm123 on Jan 30, 2020 13:36:40 GMT -8
AAPL did well today, could have been better though.
Eventually they will develop the drug for coronavirus, imagine how much AAPL will move when they do.
Cheers to the longs!!!
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Post by nwjade on Jan 30, 2020 13:58:11 GMT -8
AAPL did well today, could have been better though. Eventually they will develop the drug for coronavirus, imagine how much AAPL will move when they do. Cheers to the longs!!! Don't you know a drug for the coronavirus is already baked into the stock price...?
Just front running cnbc here
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4aapl
Moderator
Posts: 3,625
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Post by 4aapl on Jan 30, 2020 14:11:08 GMT -8
AMZN up $240.00 after hours . I still have shares, did you keep yours JD? Crazy! But while the revenue beat isn't that sizable, the EPS beat is amazing! finance.yahoo.com/news/amazon-q4-earnings-201121959.htmlI can't wrap my head around their P/E. OTOH, my feeling is that having a few FAANGs in the 1T club, especially with much higher P/E's, helps make it so AAPL isn't held back as much just from worries over it's size. "We can all be winners!!!!" Here's your trophy
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JDSoCal
Member
Aspiring oligarch
Posts: 4,182
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Post by JDSoCal on Jan 30, 2020 14:19:15 GMT -8
Wow on AMZN. 📈 I am envious when other companies pop like this.
I’ve only held Amazon options, and I go risk-off for earnings. It’s all a crapshoot. 🎲 🎲 Although it does seem lately as if most big companies are mastering the art of engineering beats.
Biggest quarter in the history of business and we’re up a buck. 🤬
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bud777
fire starter
Posts: 1,352
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Post by bud777 on Jan 30, 2020 14:32:19 GMT -8
Seems to me that fractional shares kind of offsets the potential advantages of a stock split. All those potential APPL buyers who were priced out of ownership at 300 per share can now climb on board. I'm not sure i like that, but one should not be selfish. More buyers are always welcome.
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Post by silkstone on Jan 30, 2020 17:25:52 GMT -8
Wow on AMZN. 📈 I am envious when other companies pop like this. I’ve only held Amazon options, and I go risk-off for earnings. It’s all a crapshoot. 🎲 🎲 Although it does seem lately as if most big companies are mastering the art of engineering beats. Biggest quarter in the history of business and we’re up a buck. 🤬 Yep, seems like we should be higher, definitely something wrong with this picture.
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Post by nwjade on Jan 30, 2020 18:15:33 GMT -8
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4aapl
Moderator
Posts: 3,625
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Post by 4aapl on Jan 30, 2020 19:00:02 GMT -8
Wow on AMZN. 📈 I am envious when other companies pop like this. I’ve only held Amazon options, and I go risk-off for earnings. It’s all a crapshoot. 🎲 🎲 Although it does seem lately as if most big companies are mastering the art of engineering beats. Biggest quarter in the history of business and we’re up a buck. 🤬 Yep, seems like we should be higher, definitely something wrong with this picture. It all depends on how you look at it. Here's a Yahoo chart comparing the FAANG companies, plus TeslaIn most cases, if AAPL isn't the best performing, it is close to it. At the 6 month and under charts, Tesla rocks it. But being second best puts AAPL above all the rest. At 1 year, AAPL nearly ties TSLA for first. And 2 years, AAPL nudges out TSLA for the win. At 5 years, AMZN and NFLX win by a huge margin. Incidentally, TSLA is up over 100% in the past 3 months, but on the 5 year chart it's previous 4.75 years the S&P did better than it. That who profit thing is really getting the stock moving. The charts will be different tomorrow, depending on how much of this nearly 10% after-hours gain AMZN holds onto. But in the charts less than 5 years, AAPL currently is doing better than AMZN. Often, having some competition in the field makes everyone do better. It's not a race...but if it were, AAPL would be doing pretty well.
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Post by hyci004 on Jan 30, 2020 19:08:19 GMT -8
Yep, seems like we should be higher, definitely something wrong with this picture. It all depends on how you look at it. Here's a Yahoo chart comparing the FAANG companies, plus TeslaIn most cases, if AAPL isn't the best performing, it is close to it. At the 6 month and under charts, Tesla rocks it. But being second best puts AAPL above all the rest. At 1 year, AAPL nearly ties TSLA for first. And 2 years, AAPL nudges out TSLA for the win. At 5 years, AMZN and NFLX win by a huge margin. Incidentally, TSLA is up over 100% in the past 3 months, but on the 5 year chart it's previous 4.75 years the S&P did better than it. That who profit thing is really getting the stock moving. The charts will be different tomorrow, depending on how much of this nearly 10% after-hours gain AMZN holds onto. But in the charts less than 5 years, AAPL currently is doing better than AMZN. Often, having some competition in the field makes everyone do better. It's not a race...but if it were, AAPL would be doing pretty well. AAPL is also the only company in FAANG group to pay a dividend.
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JDSoCal
Member
Aspiring oligarch
Posts: 4,182
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Post by JDSoCal on Jan 30, 2020 19:40:01 GMT -8
I didn't know that Netflix had slowly devolved to having a lot less content from other providers. But this was predictable, hence the Enron comparison. Studios began looking at Netflix reselling their content, and asking themselves, "what do we need you for?" Not like Netflix was streaming on some platform with a solid barrier to entry, like, say, iOS hardware. It's the Internet; anyone can do it. I actually saw this coming a long, long time ago, because I actually lived it a decade before Netflix was even a thing. I was in sports journalism and was one of the first to offer pay for play sports video content. It was on a very small scale (college basketball), but I saw first hand how the creator/rights holder - in this case, college athletics departments - looked at what we were doing (interviews and other non-game content with players and coaches, etc) and asking themselves, "what do I need you for?" And of course the schools and conferences cut us out of the loop, and now broadcast their own content on their own websites. It really was mutual, as I saw the handwriting on the wall, and knew it wasn't a path of great profits for me, and I moved on before that ultimately happened, so whatever. But lesson learned. I also saw one of the modern era's greatest grifters snooker a major tech company in this game: Mark Cuban and Broadcast.com. Cuban started Broadcast.com at a time when all the media companies were scrambling to get an Internet presence, and were throwing money at anything Internet. Cuban's idea at Broadcast.com was to stream audiocasts of professional and college sports games over the Internet for fans who didn't have access to TV broadcasts (this was long before conference sports packages on DirecTV and cable). So Cuban sold this bill of goods to Yahoo for $5.7 billion 1999 dollars. The problem was, something I saw immediately, was that Cuban hadn't secured long-term licensing rights to these games. My limited experience in the sector, plus just common sense told me that, without rock solid, long-term licensing rights secured, Yahoo just bought a domain name and a Website with no content for billions of dollars. How could those executives not see it? It was so obvious! A total scam. Broadcast.com no longer even exists, and redirects to Yahoo. Yahoo has now gone private because it was about to be de-listed on NYSE, but its market cap was under a billion by then, like one sixth of the Broadcast.com acquisition. The worst deal ever, until of course the Time Warner-AOL deal, which was just an incomprehensible nuclear evaporation of shareholder wealth.
Turns out, buying a bunch of users subscribed to an obsolete online business model is a bad dealio. Cuban is a scammer and how CNBC can have him on that Shark Tank show as some business expert is just astounding. He sold them a freaking worthless Website. So beware of grifters selling that which they don't own. Brooklyn Bridge, Eiffel Tower, entertainment content, etc. And since the studios have no use for cutting Netflix in on their content, Netflix has to hemorrhage endless cash producing content. They leverage the farm every year for this bottomless money pit of binging that its insatiable viewers demand. I mean they spend billions on shows that people binge watch in a weekend. Or some viewers only watch for two minutes. I don't see how you make that profitable when studios used to make one movie, ride it out in theaters for months, and upsell you popcorn and candy and drinks and you leave $50 lighter for ONE MOVIE. Sometimes those movies didn't even break even until international or DVD releases. But now, you're going to somehow produce endless content for people who sit at home and watch and eat their own popcorn and candy and drinks for a small flat fee that wouldn't even have gotten you into a theater for one movie 20 years ago? It would take one hell of a bankroll of capital to pull that off.
I mean you'd have to have a really rich uncle or a pile of cash the size of Mt Everest lying around or something to subsidize that business for the foreseeable future until it became profitable on its own. Anyway, back to our little fruit company. Apple's big problem these days? WTF do we do with this big pile of money the size of Mt. Everest that we get from selling tens of millions of iPhones? Yes, if anyone can do it, Apple can do it. But what the hell do they need $154B (plus debt) Netflix for? Hell, Netflix might end up a studio and sell its content in pieces, but an acquisition for that sinking ship because you need a navy to go along with your peerless army and marines and air force? No F-ing way. Spend that money on content (or a special 25-year-stockholder-only dividend ). But you don't buy Broadcast.com. Or AOL! The scary thing is, $100B for AOL in 2000 is almost exactly $154B in today's dollars.
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Post by longsince98 on Jan 30, 2020 22:55:40 GMT -8
“Yes, if anyone can do it, Apple can do it. But what the hell do they need $154B (plus debt) Netflix for?“
I’m deeply involved with that exact world - and you’re spot on with much of what you said JD.
Plus Apple always chooses quality over quantity, so there’s a major culture clash between them.
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Post by audiosculpture12 on Jan 31, 2020 0:34:13 GMT -8
Greatposts lately Jd, thanks.
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Post by zzmac on Jan 31, 2020 5:45:23 GMT -8
I thought I read a while back that Apple had plans to also produce some movies that would first appear in theatres and after a run would be added to Apple TV+. That would make more sense financially.
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Dave
Member
"It's tough to make predictions, especially about the future." Yogi Berra
Posts: 4,093
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Post by Dave on Jan 31, 2020 7:23:25 GMT -8
I sometimes think that the only group to benefit from most of this content produced by the streaming services are the big name actor’s that would otherwise be setting at home wishing they had a job. I see them playing roles they never would have considered in years past. Most of this content is far from entertaining. Big money is being thrown against the wall praying that some of it will stick and be entertaining. I find myself preferring some of the reruns from years past over some of the junk offered today. I believe that someday historians will view this period in the entertainment business as the bottom and it will all be forgotten. Sad.
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