Speaking of overnight returns, the returns of Netflix (NFLX) aren’t making its stockholders happy this morning. The stock is getting hammered. Incidentally, one of our top young analysts Andrew Freedman, recently launched coverage on the communications sector. With some level of brazen confidence, his first idea was to publish on Netflix as a "Best Idea" short idea. He was one of three analysts (out of 40) short Netflix into the quarter.
Andrew’s thesis wasn’t based on randomness, but rather an in-depth view of the content obligations, emerging competition and most importantly, proprietary trackers that looked at real-time subscriber growth at Netflix. It was this last metric that seems to have come to fruition this quarter.
In the Chart of the Day below, we show a chart from his June note flagging a meaningful drop off in NFLX app downloads.