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re: Netflix $200

Posted on 12/10/10 at 3:45 pm to
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 12/10/10 at 3:45 pm to
Hah. The S&P is market-weighted. Netflix could collapse to a P/E of 5 and it probably would have a not even a marginal effect on the index. Come on Denniger, that's basic fricking finance.
This post was edited on 12/10/10 at 3:52 pm
Posted by kfizzle85
Member since Dec 2005
22022 posts
Posted on 12/10/10 at 3:50 pm to
FTR:

NFLX market cap = 10.17B
S&P 500 market cap = somewhere north of $10T.

So yeah. ETA: That market cap puts them at about place 201.
This post was edited on 12/10/10 at 3:52 pm
Posted by RedStickBR
Member since Sep 2009
14577 posts
Posted on 12/10/10 at 3:55 pm to
quote:

Hah. The S&P is market-weighted. Netflix could collapse to a P/E of 5 and it probably would have a not even a marginal effect on the index. Come on Denniger, that's basic fricking finance.



He addresses that in the article. I think he's just advocating that the people constituting the index don't let this become standard practice.

And I wonder what Netflix' market cap is relative to the other constituents. I haven't looked into that. ETA: I just read your follow up. Nice one.
This post was edited on 12/10/10 at 3:57 pm
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