Fiscally, Netflix runs a lot like a government, going deeper in debt every day. From Simon Black at sovereignman.com:
Shares of Netflix soared today on news the company lost a record $859 million in cash in the third quarter.
Why are investors applauding this egregious destruction of capital?
Well, it’s because investors only look at one number when Netflix reports earnings – subscriber growth.
And on that metric, the company outperformed, adding 6.96 million subscribers, bringing the global total to more than 137 million.
At 137 million subscribers, Netflix has about 2% of the global population as customers.
There are still around 90 million traditional TV accounts in the US (and about 36% of those also have a streaming account).
So there’s definitely room for Netflix to grow in the US and abroad (where the majority of growth is coming today).
