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Our Communications analyst Andrew Freedman is hosting a call January 16th at 12:30 PM ET to review his latest thoughts, data updates, and new analysis on the Long Disney (DIS) / Short Netflix (NFLX) thesis. |
In this call we aim to provide a comprehensive, evidence-based answer to the two questions we have been getting most from investors:
- Did we overstay our welcome on the NFLX short?
- Is the success of Disney+ priced in?
We continue to believe the Long DIS / Short NFLX trade has legs through 1H20.
NFLX: Shares of Netflix have risen ~17% since Q3 earnings as fears over competition abate, and new reporting disclosures stoke investor optimism over the international growth story. However, we believe such confidence is misplaced as Netflix becomes increasingly reliant on lower ARPU regions to drive sub growth. Meanwhile, the growth rate in Netflix mobile app downloads continues to slow, with our models forecasting a sequential decline in global net paid adds in Q4.
DIS: We continue to be surprised by the level of investor skepticism surrounding Disney's stock in the face of rising subscriber expectations for Disney+. Our latest survey work (as of 12/31) suggests Disney+ finished the quarter with at least 20M paid subscribers worldwide. At the same time, early indications of churn are coming in better than we had anticipated post the airing of the last episode of The Mandalorian.
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