Media forecast: Netflix shares will shrink by at least 50% by the end of 2020

Barron's believes that Netflix's share price will fall by at least 50% by the end of 2020.

Original title: Barrons 'Weekly: Netflix's share price will shrink by at least 50% before the end of 2020

. Netflix's classic original drama "House of Cards"

has been moving forward in recent years. Netflix seems to have encountered trouble recently. Barrons' Weekly believes that Netflix's share price will fall by at least 50% by the end of 2020.

Admittedly, Netflix is now a FAANG stock, its share price has soared 69 times in the past decade, and its streaming service is growing rapidly. However, from the perspective of content, Netflix is still only a rental company, not the owner of content, which is its biggest weakness.

Here are a list of Netflix's weaknesses listed by Barron's Weekly:

1. Video is expensive, and Netflix doesn't have much cash right now, making it difficult to buy blockbusters. Of course, Netflix's original content costs more money. They may burn $2 - 2.5 billion in cash this year, compared with $1.7 billion last year. It is worth noting that Netflix's long-term debt now reaches $4.8 billion.

2. Separating from Disney will be a huge blow to Netflix. In the future, it will be more difficult for them to obtain the rights to play content, and they will also face competition from Disney's streaming platform. In addition, many content producers have signed up with Hulu, Netflix's arch-enemy.

3. The cash flow generated by Netflix cannot support its share price. According to media reports, Netflix's market value has reached 146 times its 2017 revenue.

4. After Disney announced last week that it was breaking up with Netflix, its shares fell 5%. At the same time, Netflix will be under greater pressure after Facebook original videos join the competition.

However, some people also laughed at Barron's because their predictions have become reverse indicators. In September 2015, they said that Alibaba's share price would fall by 50%, but after the forecast, Alibaba's share price rose by 135%.

Editor: Mary