Netflix is currently breaking all records with "Squid Game". Within four weeks, the series was accessed by 142 million accounts of the streaming provider. In the production from South Korea, people in debt get involved in a deadly children's game with high prize money. The brutal series topped the Netflix charts in 94 countries, including Switzerland. At virtually the same time, the US company stormed the stock market hit parade. While Wall Street as a whole recently stalled somewhat, Netflix shares made strong gains. Over the course of a month, the gain amounts to 8%. Nearly two decades after going public, the capitalization of the company, which started as an online DVD rental service, is heading towards the USD 300 billion mark for the first time.
With its recent advances, Netflix has also delivered a chart signal. The stock was able to unwind a tenacious sideways move to the upside. Shortly after mid-2020, the growth stock had launched this constellation. Since then, Netflix kept bouncing off the resistance zone in the USD 550 area. About USD 75 lower, the lower boundary of the price corridor has emerged. After the stock dipped below the 200-day line for the first time in a long time in the spring, it approached the southern terrain of the outlined sideways trend. It did not break out to the downside. Rather, Netflix climbed back above the moving average in August. Thereafter, the upward momentum increased significantly and the stock was able to initiate the latest breakout.
Surprisingly quickly, Wall Street "forgave" the industry behemoth for its rather disappointing Q2 2021 interim report. In late July, Netflix reported a lower-than-expected profit while providing a cautious outlook. CEO Reed Hastings expected 3.5 million new users in Q3. Analysts had thought 2 million more new signups were possible by the numbers date. In fact, Netflix landed pretty much right in the middle. In the period from July to September, the video service welcomed 4.4 million new customers. This meant that the California-based group significantly exceeded its downwardly revised expectations. The same applies to earnings: Netflix earned USD 3.19 per share in the 3rd quarter. Analysts had expected an average of USD 2.56. Not least because of the success of "Squid Game", the CEO expects 8.5 million new sign-ups in the current 4th quarter - the consensus here had been 0.2 million smaller until yesterday's numbers date.
For investors who are shying away from buying Netflix stock, which has been bullish of late, despite the strong interim report, two new soft-callable barrier reverse convertibles could be of interest. In the yield-optimizing structure, the Nasdaq high-flyer receives a 31% risk buffer. As long as the underlying does not use up this cushion, the investment will yield the maximum return corresponding to the coupon at maturity in 15 months. In the product currency CHF, the quarterly distribution is 9% p.a.. In the USD-denominated alternative, the issuer pays out 100 basis points p.a. more. The Softcallable Feature has a positive effect on the outlined conditions. Leonteq can call the Barrier Reverse Convertibles for the first time after 6 months and then quarterly. If the issuer makes use of this option, product holders would receive the pro rata coupon in addition to the full nominal within a few days. The associated reinvestment risk is compensated for by a comparatively high coupon and a relatively low barrier.
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