Survey Shows Netflix is Fine without Disney

Analyst sees Disney loss having minimal impact on Netflix subscribers

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more

Although Netflix (NFLX) shares slipped following Disney’s (DIS) announcement that the company was ending its distribution agreement with the former, Piper Jaffray analyst Michael Olson told investors that he believes the loss will have a minimal impact on the streaming service subscribers.

SURVEY SAYS

In a research note to investors this morning, #Piper #Jaffray’s Olson says Disney ending its agreement for distribution of certain content is a negative headline, but it will have “minimal impact” on Netflix.

This follows his firm survey of over 500 U.S. Netflix subscribers, asking what percent of their Netflix time is spent on Disney.

The analyst pointed out that Piper found that “only” around 20% of subscribers spend greater than 10% of their Netflix time viewing Disney content.

Further, he expects “almost none” of the remaining 80% of subscribers to cancel due to the loss of Disney.

The 20% of heavier Disney viewers are unlikely to cancel unless Disney accounts for a larger portion, greater than 40%, of their Netflix viewing time, Olson contended.

While #Olson recognized the strength of Disney’s content, particularly for younger children, the analyst noted that he believes Netflix can license similar genre content from other sources and/or use the cost savings for original programming.

Netflix is likely already in the process of determining how to effectively reallocate funds previously earmarked for Disney, he said, adding that the company has nearly 18 months to plan for this change. The analyst reiterated an Overweight rating and $215 price target on Netflix’s shares.

ENDING AGREEMENT

Last week when Disney reported third quarter earnings, the company announced that it will launch its ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019. Additionally, Disney said it will end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year film slate.

PRICE ACTION

In Monday morning trading, shares of Netflix have dipped 0.66% to $170.27, while Disney’s stock is fractionally up to $102.20.


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The Fear Index Soars as Stocks Tumble

U.S. VIX Volatility Surges over 30% to clear 15.00

Buying Opportunity for Some Stocks this afternoon

VIX surges over 30% to above 15.00. See Stockwinners.com Market Radar to read more.

U.S. VIX (VIX) equity volatility surged over 30% to briefly clear 15.00 en route to 15.36, a 3-month highs after taking out 15.16 from June 29th, having cleared the 11.98 or its 200-day moving average earlier this week.

The spikes in the VIX represent a market sell-off.

That puts the double top near 16.30 from April/May within reach, ironically after recent rounds of trader layoffs in the financial sector due to persistently low volatility.

A breakout higher amid record speculative VIX short interest could put 23.01 November 2016 and 26.72 from July 2016 in scope.

Pullbacks will eye 11.98 and 11.56 session lows for support, along with all-time lows of 8.84 from July 26.

U.S. VIX equity volatility surges, See Stockwinners.com Market Radar

The S&P 500 (SPX) meanwhile is fast approaching its 2,448.3 or it’s 50-day moving average support line, which has provided investors a buying opportunity for the past several months.

It appears that investors may forgive legislative impasse, but are less generous about a nuclear war!

NASDAQ is off 1.2% and the Euro Stoxx 50 is 1.2% lower.

REBOUND POSSIBLE

Based on the charts show above, we expect the sell-off to continue into late afternoon on Thursday with a recovery into close, followed by a short-covering rally on Friday August 11th. Use this afternoon sell off to buy stocks that should be sold on Friday.

STOCKS TO WATCH

NFLX, EXEL, TTD, XXII, NVDA, AAPL, PEGA, SINA, SQ, USCR, YY.

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RingCentral is For Sale

RingCentral could be acquired for mid $50s per share, says SunTrust 

RingCentral could be acquired for mid $50s per share. See Stockwinners.com Market Radar to read more

After Bloomberg reported that RingCentral (RNG) had hired an adviser after drawing buyout interest, SunTrust analyst Terry #Tillman says the company could be acquired for a price in the mid $50s per share range ” if the company’s value proposition is viewed as a knowledge worker/business productivity platform versus simply business phone systems.”

The analyst recommends that investors focused on the company’s fundamentals own the stock. “based on strong top-line growth and expanding margins and cash flow.”

RingCentral could attract interest from technology-focused private equity firms and other cloud-based software providers, two of the people said. RingCentral may choose not to proceed with a deal, the people said, asking not to be identified as the details aren’t public.

RingCentral last week reported second-quarter revenue of $119.4 million, up 30 percent from the same period a year ago.

The company, which went public in 2013, runs a platform that connects devices for corporate clients, allowing them to link employees’ smartphones, tablets, desktop computers and landline telephones to communicate via voice, text and fax.

It generates most of its revenue from subscriptions, including those sold through resellers including AT&T Inc.

Note that Stockwinners featured RNG at $36.50 and closed the position at $42 yesterday.

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Altice is Interested in Charter

If a deal goes through, Charter could fetch over $470 a share

Altice is Interested in Charter. See Stockwinners.com Market Radar for details

Altice (ATUS), the cable and telecoms group controlled by Franco-Israeli billionaire Patrick Drahi, is lining up a potential $185 billion bid for Charter Communications (CHTR), the second-largest US cable company, according to the FT.com.

The move highlights an expected wave of consolidation in the industry as cable companies enter the wireless business and also look for additional ways to cut costs and grow as more U.S. consumers are cutting their cords.

Altice USA’s initial public offering in June was viewed as a means for Altice to expand into U.S. cable empire by giving the company public stock it can use as currency for new acquisitions.

In May, #Drahi told reporters that he considered cable expansion a priority, followed by mobile and content.

Altice is working with banks to finance the deal through cash and equity, a source said.

Buying another cable company would give Altice USA, currently the fourth-biggest U.S. cable provider, the opportunity to build more scale and cut costs in the United States. Altice completed its $17.7 billion acquisition of Cablevision last June, after buying Suddenlink for $9.1 billion in 2015.

CHTR last traded at $398.45. ATUS  last traded at $30.95.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.