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Investors Are Missing Why $NFLX Is In A Lot Of Trouble

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This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

Investors are missing a major problem with Netflix, Inc. (NASDAQ:NFLX) and it could send the stock crashing. Over the last few days, it appears President Donald Trump will do away with the net neutrality rules. Many investors have no clue what this is, but I will explain. It basically means that whether a website takes up a ton of data space on the internet or almost zero, they cannot be charged or treated differently. So a website like Netflix, Amazon or Hulu pays nothing extra to the providers of bandwith even though their content clogs the internet. That is likely to change. If net neutrality is done away with, providers of internet can start charging for the amount of usage. Needless to say, Netflix users watch a huge amount of content, taking up a ton of data. Internet providers will likely start charging Netflix a fee if Netflix wishes to continue to get fast speeds of content delivery. Considering the average users pays between $10-$15 for Netflix, this fee will likely dig into the bottom line of Netflix. This means lower earnings. Investors have not even begun to factor this into the price of Netflix, Inc. Keep this in the back of your mind. I am short the stock above $150 on this possible outcome.

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Netflix, Inc. is a strong sell on vanishing net neutrality


This article was written by Tony Jackson for on .

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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