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MSGF Finance Seminar - Netflix Valuation in the COVID-19 Era

Speaker: Prof. Alminas Zaldokas

Associate Professor of Finance, HKUST Business School

Date: June 14, 2023 (Wednesday)

Time: 6:30-8:30pm

Location: Room1-3, FINE TOKYO, 5th Floor, South Tower, Otemachi Financial City, 1-9-7 Otemachi, Chiyoda-ku, Tokyo

* This event is in collaboration with CFA Society Japan

On April 21, 2020, Netflix, Inc. (Nasdaq: NFLX), the world’s leading movie and TV-show streaming entertainment service company, announced it had added 15.8 million new subscribers as a large fraction of the population was confined at home due to the COVID-19 pandemic. At the same time, Netflix stock was up +34% year to date, making it one of the few companies to see its shares appreciate since the coronavirus crisis started. But the company was still recording negative free cash flows due to large investments in new content, and it was already trading at a higher multiple than other big tech peers. What should have been the valuation of Netflix stock price?

In this seminar, we will explore the challenges of valuing young, rapidly growing but often still unprofitable technology firms. We will use “Netflix, Inc. in the COVID-19 Era: Valuing a High-Growth Subscription-Based Business” (University of Virginia Darden School) to:

  • illustrate the mechanics and highlight the challenges of discounted cash flow (DCF) valuation,

  • suggest an alternative valuation framework based on “unit economics” and “customer lifetime value” (LTV),

  • evaluate whether customer stock price is reasonable given customer lifetime value and total addressable market.


Professor Alminas Žaldokas is currently Associate Professor of Finance at HKUST Business School. He received his Bachelor of Science from the Stockholm School of Economics in Riga, Master of Science in Finance and Economics from the London School of Economics, and the Ph.D. in Finance from INSEAD (France). He previously taught MBA and Evening MBA students as the Visiting Assistant Professor at the McCombs School of Business at the University of Texas in Austin.

Professor Žaldokas’s research papers have been published in the leading academic journals such as the Journal of Financial Economics, Review of Financial Studies, Management Science, Journal of Accounting Research, RAND Journal of Economics, Journal of International Economics, and Journal of Financial Intermediation. His research focuses on the interaction between firm decisions in the financial and in the product markets. In particular, he studies corporate finance decisions that relate to the firm investment in innovation and the formation of collusive arrangements between firms.

Professor Žaldokas’s recent work has looked at how higher corporate taxes affect firm investment into innovative activities, and how firm financial disclosure such as conference calls with equity analysts might aid price-fixing in product markets. This research has contributed to the policy evaluation and has been recognized by the practitioners. Professor Žaldokas has presented his research work in the conferences organized by the Securities Exchange Commission (SEC), Federal Trade Commission (FTC), and the Brookings Institution, and it has been summarized in the policy brief by CATO Institute. His work on international antitrust laws and M&A transactions was awarded Jerry S. Cohen Award for Antitrust Scholarship for the best antitrust work in 2019.


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