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from Breakingviews:

Netflix stock horror follows familiar script

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Netflix is sticking to the script. The film and TV streaming service lost $7 billion of market value in after-hours trading on Wednesday following news that it had signed up fewer new subscribers last quarter than originally forecast. Even for one of the most-shorted and volatile stocks, a 25 percent decline is notable. And yet investors have seen this movie before.

All the familiar frights were on display. The cost to Netflix of buying and creating new programming - including its first original movie “Crouching Tiger Hidden Dragon: Green Legend” - keeps rising. The tally increased to $8.9 billion at the end of September from $7.7 billion at the end of June. That, along with the price of overseas expansion, meant free cash flow turned negative again. Then there’s Netflix’s demanding valuation. Even after the sell-off, the shares trade on a head-spinning multiple of 86 times earnings for the last 12 months.

Most of the expected thrills repeated, too. The company’s U.S. streaming “contribution margin”, which excludes certain costs like technology development, rose to 28.6 percent, up 5 percentage points from a year ago. Netflix is aiming for 40 percent in about five years. Higher prices may have stung, but the company keeps adding a healthy number of new subscribers, who it says are watching more and sticking around for longer. It also secured seven Emmy Awards and has signed new deals with comedy stars Adam Sandler and Judd Apatow.

from Breakingviews:

Qualcomm signals $2.5 bln belief in Bluetooth

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Qualcomm’s 1.6 billion pound ($2.5 billion) deal to buy Britain’s CSR sends a positive signal to rivals on Bluetooth. The U.S. chipmaker’s $120 billion market cap means the purchase isn’t a stretch - but it comes at a high price and an odd time.

from The Great Debate:

Here’s what it will take for Americans to start getting pay raises

Demonstrators rally to raise the hourly minimum wage for fast-food workers at City Hall in Seattle

What will it really take to give America a raise?

A lot of well-credentialed policy experts have been writing nonsense about why Americans can’t be paid more.

One bogus story is that young people and working moms (whatever happened to working dads?) love the new “flexible” economy of Task-Rabbits working odd jobs. Or they’re Uber drivers or Starbucks clerks, marking time until their economic adulthood begins.

from Breakingviews:

A creative NFL would lean in to Sheryl Sandberg as commissioner

sherylsandberg.jpg

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

The latest uproar over the National Football League may have died down, but team owners convening this week are fooling themselves if they think the backlash is over – or that Commissioner Roger Goodell won’t bungle the next big controversy that comes along. An unconventional idea for a replacement is Facebook No. 2 Sheryl Sandberg.

from Breakingviews:

Meg Whitman at last splits Hewlett from Packard

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Hewlett and Packard are finally going their separate ways. Not literally, of course, as the founders of the Silicon Valley technology conglomerate that bears their names have long shuffled off this mortal coil. But the company now led by Meg Whitman is breaking in two.

from Breakingviews:

PayPal forced to rev after eBay’s belated U-turn

By Rob Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

PayPal is compelled to accelerate after eBay’s belated U-turn. The $70 billion online auction company has for years resisted setting free its payments business, most recently digging in its heels against Carl Icahn’s demands to do so. Apple and Alibaba have created more urgency than investors, or Breakingviews, could. EBay squandered a big early advantage, but a spun-off PayPal may have a chance to play catch-up.

from Breakingviews:

Uncle Sam gets wires crossed on data privacy

By Reynolds Holding

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Uncle Sam has gotten his wires crossed on internet data privacy. A hacker went to prison for exposing private customer information that AT&T failed to protect from online access. Now U.S. prosecutors are defending their right to do essentially the same thing in the Silk Road drug-website case. Anti-hacking laws are tough to take seriously when even enforcers can’t decide what’s allowed.

from Financial Regulatory Forum:

Safeguard customers’ personal information; regulators are watching

By Julie DiMauro, Compliance Complete

NEW YORK, Sept. 19, 2014 (Thomson Reuters Accelus) - In a sanction that can serve as a wake-up to the financial industry, Verizon Communications last week agreed to pay $7.4 million to end an investigation that found it failed to tell two million new customers about their privacy rights before using their information for marketing purposes, the Federal Communications Commission said.

The privacy probe highlights the vigilance that must be paid to consumer privacy rights to meet regulators’ requirements. Although the financial industry mostly answers to different regulators, it too is subject to laws and regulations protecting the privacy of its customers.

from Breakingviews:

Larry Ellison cedes driver seat with hand on wheel

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Larry Ellison is ceding the driver’s seat at Oracle while keeping one hand on wheel. The software giant’s founder is stepping down as chief executive officer, but his 25 percent stake in the company – and dual role as chairman and chief technology officer – ensure he’s far from relinquishing control. Splitting his former job between two executives could, however, lead to a bumpy transition.

from Breakingviews:

VC bigwigs reveal Valley’s contradictions

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

A venture capitalist who can co-opt the opening lines of “Anna Karenina” to make a business point deserves attention. In Peter Thiel’s case, he also started PayPal and Palantir Technologies and invested early on in Facebook. His new book, “Zero to One,” describes possible features of the next peerless, world-changing startup – another Google, say.

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