Jun. 29 at 3:34 AM
$NFLX If reports are accurate that Berkshire Hathaway invested
$2.5 billion in Netflix over the past three weeks at an average price of around
$73.25 per share, it could become one of the year’s most significant investment stories. Warren Buffett has built his reputation by buying outstanding businesses when market sentiment is negative and valuations become attractive.
It’s 42% from its recent highs, bringing its P/E ratio to about 23.2, a much more reasonable valuation than during its peak. Despite the downfall strong free cash flow, expanding advertising revenue, and continued investment in original content, live programming, and international growth.
If Berkshire is indeed buying aggressively, it would suggest confidence that the market is overly focused on short-term concerns while overlooking Netflix’s long-term earnings potential. Buffett has repeatedly shown that periods of fear often create the best opportunities to invest in high-quality companies at discounted prices.
