$Netflix(NFLX)$ Netflix is becoming a value trap disguised as a growth story.

Everyone’s fixated on the guidance beat, but I think we’re witnessing the peak of Netflix’s relevance:

The streaming wars are entering consolidation phase - and Netflix loses. Disney has Marvel/Star Wars, Amazon has Prime ecosystem integration, Apple has infinite cash. Netflix just has… content spend. Their competitive moat was being first to streaming, but that advantage is gone. They’re now the most expensive pure-play in a commoditizing industry.

The ad tier “success” is actually margin destruction. Yes, ad revenue is growing, but it’s cannibalizing higher-margin subscription revenue. Netflix is essentially training their customers to pay less while increasing their own operational complexity. This is the opposite of a healthy business evolution.

International growth is hitting structural limits. Their big subscriber adds are coming from markets with low purchasing power and high piracy rates. Revenue per user in these markets will never approach developed market levels, but content costs are global. The math doesn’t work long-term.

Content spending is a treadmill to nowhere. Netflix has to keep spending $15+ billion annually just to maintain subscriber interest, but they don’t own franchises like Disney or have ecosystem lock-in like Amazon. Every dollar spent on content has zero residual value.

The real threat: Netflix is about to face the same fate as cable TV - becoming a utility that people grudgingly pay for while spending their attention (and premium dollars) elsewhere.

At 40% YTD gains, the market is pricing in perfection for a business model that’s fundamentally flawed in a post-scarcity content world.

This earnings pop is a gift to exit before the inevitable multiple compression.​​​​​​​​​​​​​​​​