Is Netflix, Inc. (NFLX) Stock Responding to Walt Disney’s (DIS) Deal With Alibaba (BABA)


Netflix, Inc. (NASDAQ:NFLX) shares are down 1.24% in pre-market trading this morning, and while this isn’t a major move by any means, some investors are wondering if perhaps a deal that was just reached between Walt Disney (NYSE:DIS) and Alibaba (NYSE:BABA) could be the culprit.

The deal which was announced on Wednesday sees Alibaba teaming with Walt Disney to bring Pixar and other Disney moves to Chinese TV viewers through an over-the-top service. The service is quite unique and can be ordered through the Alibaba marketplace. Netflix, Inc. (NASDAQ:NFLX) should be at least slightly concerned about losing potential marketshare in the world’s most populated country.

“It strikes me as a win-win deal for both companies,” said Morningstar analyst RJ Hottovy. “Alibaba adds an important content provider that also opens up general merchandise and travel cross-selling opportunities, while Disney gets more direct access to the Chinese consumer.”

The stock closed at $122.51 during the last trading session. It is down 80.02% since May 15, 2015 and is downtrending. It has underperformed the S&P500 by 77.76%.

From a total of 25 analysts covering Netflix (NASDAQ:NFLX) stock, 20 rate it a “Buy”, 0 a “Sell”, and 5 a “Hold”. This means that 80% of the ratings are positive. The highest target price is $175 while the lowest target price is $72. The mean of all analyst targets is $132.72 which is 8.33% above today’s ($122.51) stock price. Netflix was the topic of 36 analyst reports since August 4, 2015 according to the firm StockzIntelligence Inc. Topeka Capital Markets maintained shares on November 16 with a “Buy” rating. BMO Capital Markets initiated shares with a”Market Perform” rating and a $115 target share price in their report from an October 9. Oppenheimer maintained NFLX stock in a recent report from October 15 with a “Outperform” rating. Vetr upgraded the rating on September 1. Vetr has a “Hold” rating and a $122.24 price target on shares. Finally, JP Morgan maintained the stock with a “Overweight” rating in a report they issued on an October 15.

The institutional sentiment increased to 1.54 in Q2 2015. It’s up 0.29, from 1.25 in 2015Q2. The ratio increased, as 58 funds sold all their Netflix, Inc. shares they owned while 194 reduced their positions. 149 funds bought stakes while 238 increased their total positions. Institutions now own 639.63 million shares which is 1081.93% more than the previous share count of 54.12 million in 2015Q2.

Srs Investment Management Llc holds 40.42% of its total portfolio in Netflix, Inc., equating to 11.81 million shares. Technology Crossover Management Vii Ltd. owns 5.04 million shares representing 34.23% of their total US portfolio. Moreover, Ctc Llc has 33.44% of their total portfolio invested in the company, equating to 645,718 shares. The Pennsylvania-based Barton Investment Management has a total of 29.76% of their portfolio invested in the stock. Tiger Global Management Llc, a New York-based fund reported 18.00 million shares owned.

Since February 25, 2015, the stock had 0 insider buys, and 24 insider sales for a total of $98.33 million in net activity. Barton Richard N sold 2,800 shares worth $281,260. Hastings Reed sold 86,037 shares worth $8.68M. Battle A George sold 49,000 shares worth $5.29M. Cranz Tawni sold 1,512 shares worth $190,179. The insider Peters Gregory K sold 6,545 shares worth $841,491.

Netflix, Inc. is a provider of Internet television network. The company has a market cap of $52.41 billion. The Firm has over 57 million streaming members in over 50 countries. It has 326.68 P/E ratio. The Company’s members can watch more than two billion hours of television shows and movies per month, including original series, documentaries and feature films on Internet-connected screen.