MSGF Sample Class - Netflix Valuation in the COVID-19 Era

June 29, 2021 (Tue), 20:00 - 21:30 Hong Kong time

(View your local times in other countries)

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 interactive sample class, 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.

Confirmed participants will be given an abridged version of "Netflix, Inc. in the COVID-19 Era: Valuing a High-Growth Subscription-Based Business" case in advance and are required to review the case prior to attending the class. Participants might be called to answer the questions or participate in the sample class like the interactive class we typically have.


There will be an introduction to MSGF program during the sample class.


*Kindly note that personal data will be collected and further processed for the registration of the upcoming event on 29 June only.



Speakers:

Professor Alminas Žaldokas is an Associate Professor of Finance at the HKUST. He has joined HKUST in 2012 after receiving his Ph.D. in Finance from INSEAD (France). As the visiting scholar, he has also taught at the McCombs School of Business at the University of Texas in Austin.

Professor Žaldokas’s research focuses on the interaction between firm decisions in the financial and in the product markets. His 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, and Journal of International Economics. His recent work on collusion in product markets has received multiple academic and practitioner awards and has been presented in the conferences organized by the policy makers such as the Securities Exchange Commission (SEC) and Federal Trade Commission (FTC).



Schedule and Rundown:


20:00 Registration

20:05 Welcome and Introduction

20:10 Sample Class

21:00 Q & A

21:15 End


To RSVP, please click this LINK


If you have any questions, please feel free to contact Tracy Chau at msgf@ust.hk.