It’s been a blockbuster decade, but Netflix’s hot streak will end
Huge debts loom for the streaming service if it wants to compete with the newer players in the market
There are bad trades, and then there are those so teeth-clenchingly awful that they go down in history. In 2010, the New York hedge fund manager Whitney Tilson revealed that he had taken out a major short-selling position against Netflix.
Tilson told investors that Netflix’s move from a DVD-by-post business into a video streaming service pitted it against much better financed competitors such as YouTube, and that it would struggle to convince enough households to pay a monthly fee for the company’s “weak content”.
Tilson had a good record, having made millions betting against Lehman Brothers and his move was seen as so serious that Netflix’s chief executive, Reed Hastings, was prompted to intervene, issuing a rare public rebuttal...